Wednesday, October 15, 2014

Medtronic faces bone-growth shareholder class action - Businessweek

Medtronic has stymied personal injury lawsuits arising from use of their discredited bone-growth product.  State tort claims have been ruled pre-empted because the product won FDA permission to market. -gwc

Medtronic faces class action by shareholders - Businessweek:
by Jim Spencer // Minneapolis Star-Tribune

 "Oct. 11--A federal judge in Minneapolis has pushed forward a lawsuit involving Medtronic Inc.'s problematic Infuse bone growth product that could complicate the company's controversial $43 billion acquisition of Covidien.

U.S. District Judge John Tunheim will let lawyers for Medtronic investors explore an alleged coverup of Infuse's bad side effects by Medtronic officials and doctors the company paid to do research. 

Off-label use of Infuse has allegedly injured thousands of patients.

Tunheim also said the plaintiffs in the investors' class action lawsuit could pursue a claim that former Medtronic CEO William Hawkins purposely made misstatements to stock analysts to hide the fact that the Food and Drug Administration had refused to approve the next iteration of Infuse, a product called Amplify. 

 Experts say the ability to examine Hawkins' alleged misstatements, along with alleged manipulation of scientific research to cover up Infuse problems, could produce damaging publicity as Medtronic tries to consummate an already contentious attempt to buy the Irish devicemaker Covidien. If the investors' case gets to a jury that believes company officials knew of Infuse's problem but tried to hide them, a legal shield Medtronic has used to avoid thousands of personal injury claims might also be pierced. 

 "A deep-down examination of their behavior as a company puts some real pressure on them to settle [the suit]," said David Prince, a product liability specialist at William Mitchell College of Law in St. Paul."

Pre-emption remains a source of bitter frustration to patients who are not allowed to question Medtronic about its role in their injuries, said Minneapolis lawyer Stuart Goldenberg, who represents hundreds of people allegedly hurt by Infuse.
"Ironically, while the injured victims fight to even have the right to bring a lawsuit," Goldenberg said, "Medtronic has paid prior settlements regarding the Infuse product to other shareholders, whistleblowers, the federal government. And now, even Humana [health insurance company] has filed a lawsuit to get back its medical costs."
Shareholders who sued Medtronic over Infuse in 2008 received an $85 million settlement in 2012. Medtronic admitted no wrongdoing.
The new shareholders case, brought in 2013 by the West Virginia Pipe Trades Health and Welfare Fund, the Hawaii state Employees' Retirement System, and Union Asset Management Holding AG, relies heavily on disclosures in a 2012 report by the U.S. Senate Finance Committee, a 2011 issue of the Spine Journal and a 2013 reinterpretation of Infuse research data by the Yale University Open Data Access Project.
All of these reviews showed that Infuse was no more reliable than other forms of treatment, despite research that claimed otherwise by doctors who had been paid millions by Medtronic. In addition, the Senate found that some studies had been selectively edited -- at times by Medtronic's marketing department -- to downplay problems.
"You're really building your case on the literature," said Fordham law professor George Conk, who wrote legal briefs in a high-profile product liability case involving the drug Vioxx.
Conk said the discovery of facts that Tunheim has allowed in the new shareholders' suit could put Medtronic "at very substantial risk."

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