Medtronic wins temporary reprieve in ex-rep’s whistleblower suit
Bryan Shapiro, a former rep for Medtronic’s spine business, filed a whistleblower lawsuit in July 2016, alleging that Medtronic and its subsidiaries “engaged in a fraudulent scheme that caused the Medicare and Medicaid Programs to pay unlawful claims for payment” using a kickbacks scheme involving travel junkets dating back to 2000. The suit, filed in the U.S. District Court for Central California, also alleges that Medtronic “intentionally marketed devices without FDA approval, and trained and paid for physicians to train in implantation procedures with these devices.” The company was also accused of putting misbranded and adulterated implants on the market.
“As a result, defendants have reaped hundreds of millions of dollars selling the subject devices by skirting human testing required under a de novo or FDA’s most rigorous premarket approval (PMA) process to determine the safety and effectiveness device profile,” the lawsuit alleged. “These products have been involved in numerous reported adverse events, including those resulting in the need for revision surgeries, and including those resulting in paralysis and even death. Furthermore, defendants and defendants’ agents, including but not limited to hired surgeons and affiliated user-facilities, have routinely suppressed, misfiled, misreported and failed to file medical device reports (MDRs) as required.”
Medtronic moved to have the suit dismissed, countering that Shapiro “attempts to shoehorn a disparate series of allegations – many of which relate to so-called “off-label use” of Verte-Stack devices by physicians – into a False Claims Act cause of action.”
“It does not fit. The complaint applies conclusory labels and invokes irrelevant federal regulations in an effort to circumvent well-established law that off-label use of an FDA-approved or cleared product by a doctor is lawful. Neither off-label use by a physician nor the manufacturer’s promotion of such lawful uses can alone form the basis of FCA liability,” the company argued, according to court documents.
Shapiro’s assertion that the Verte-Stack devices were not eligible for reimbursement because of the alleged off-label promotion was off-base, Medtronic said.
“Despite the complaint’s assertions to the contrary, it is well-established that neither off-label use of a medical device, which is entirely lawful, nor so-called ‘off-label promotion’ by the manufacturer, standing alone, results in a false claim actionable under the FCA. Nor can [Shapiro] point to any material falsehood, an essential element of an FCA cause of action,” the company wrote in its motion to dismiss, adding that the 6-year statute of limitations also bar Shapiro’s claims.
Shapiro’s Anti-Kickback Statute claims “depend on the mistaken assumption that any payments made to a physician are per se illegal. The complaint fails to allege sufficient facts to support a plausible inference that Medtronic violated the AKS and that such violation led to a false claim,” Medtronic wrote in the motion.
Shapiro’s complaint is also not specific enough and its claims under the FDA’s conspiracy and “reverse false claims” provisions “are not supported by a single factual allegation,” according to the motion.
Judge John Kronstadt agreed in a Feb. 13 notice that he’s likely to dismiss the case.
“The court states its tentative views that it is inclined to grant without prejudice defendants’ motion,” Kronstadt wrote, ruling that Shapiro has until April 3 to file an amended complaint addressing any deficiencies.
Kronstadt also granted a joint request for 3rd-party settlement talks, giving the sides until Feb. 26 to agree on a neutral 3rd party and either set their own deadlines or ask the court to do it.