Legal News

Former Medtronic Lawyer Alleges ?Pervasive? Kickbacks at Company

By Dan Slater

Only under rare circumstances can we call a lawsuit filed in 2002 “news.” But until now, a suit brought by a former lawyer at Medtronic alleging that the medical-device maker lavished surgeons with incentives to use its products has been sealed, except for a heavily-redacted copy of the complaint.

The plaintiff in the case, reports the WSJ, is Ami P. Kelley, a former senior legal counsel for Minneapolis-based Medtronic’s spinal-device unit. Her suit apparently seeks to recoup damages on behalf of the federal government, which prohibits companies from giving doctors inducements to use products covered by Medicare or Medicaid.

U.S. Sen. Charles Grassley, R-Iowa, Feb. 11, 2008, at Faith Baptist Bible College in Ankeny, Iowa. (AP/Charlie Neibergall)

The unit’s business relationships with doctors who use its spinal-repair implants are also being investigated by Sen. Charles Grassley and have been the focus of lawsuits by other former employees. (For LB coverage of Medtronic’s 2006 settlement over kickbacks, click here.) Grassley has been looking into whether inducements for doctors, like those alleged in the lawyer’s suit, have led to what surgeons say is widespread off-label use of Medtronic spine products. The FDA has warned that surgeons’ use of a Medtronic bone graft in ways the agency hasn’t approved has led to potentially life-threatening side effects in dozens of patients.

Medtronic declined to comment on the lawsuit’s allegations. It said it has changed many business practices since the suit was filed, and is “committed to reform and transparency in the industry.”

Kelley’s suit says kickbacks were “pervasive” at Medtronic. Sales staff, she said, “routinely took physicians” visiting the spine unit’s Memphis headquarters to the Platinum Plus strip club, and picked up the tab for the dancers’ services during “VIP visits.” Kelley, reports the WSJ, also claims that on a five-day, all-expenses-paid trip to Alaska in 2001, which was billed as a “think tank,” doctors were supposed to present case studies. But, according to the complaint, little discussion of the case studies took place. One doctor scheduled to give a talk stood before the group, “said he was sorry, but he had not prepared anything,” and “drinking then commenced in place of discussion.”

Medtronic picked up the cost of fishing guides and clothing for the doctors, the suit said. It said “women were also provided for the doctors,” but didn’t elaborate.

Full post as published by Law Blog - WSJ.com on September 25, 2008 (boomark / email).