Medtronic Pays $2.8 Million to Settle Off-Label-Promotion Charges

Medtronic will pay $2.8 million to the U.S. Justice Department to settle a false-claims case that alleged that the Minnesota device maker made illegal payments to doctors to recommend a medical procedure that was neither safe nor effective.

“Today’s settlement demonstrates our commitment to ensure that beneficiaries of federal health care plans, including Medicare recipients and military families, receive medical treatments that have been proven safe and effective,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Targeting chronic pain patients with a medical procedure that lacks evidence of clinical efficacy wastes the country’s health care resources.”

The Justice Department charged Medtronic, St. Jude Medical and Boston Scientific in the case.

Charges against St. Jude and Boston Scientific were dismissed, but can be refiled.

In a statement, Medtronic denied it did anything wrong.

The case surrounds allegations of corporate promotion of uses of a neurostimulation device that were not approved by the U.S. Food and Drug Administration. The Justice Department said Medtronic paid doctors in 20 states “tens of thousands of dollars” to encourage health providers to use the device off-label.

This “created a new, rapidly-expanding market for their devices and a potentially huge source of profit for themselves at the expense of the federal treasury,” the government said in a federal lawsuit.

The $2.8 million payment by Medtronic leads to dismissal of charges in the case with no admission of liability by the device maker.

The government filed the suit on behalf of Jason Nickell of Austin, Texas. Nickell is a former Medtronic device salesman who, according to the suit, “made as much as $600,000 per year selling Medtronic neuromodulation devices to physicians and hospitals. He quit his job over concerns about the way that Medtronic devices were being promoted for an investigational procedure known as subcutaneous stimulation, Sub-Q or subcutaneous peripheral nerve field stimulation.”

Medtronic allegedly sponsored on-site training programs for the off-label use.

The company issued a statement Friday denying wrongdoing:

“Medtronic has reached a civil settlement agreement with the United States Department of Justice regarding a previously disclosed investigation, which started in October 2010. The inquiry focused on reimbursement and marketing practices related to Medtronic spinal cord stimulation devices for the treatment of chronic pain.

“Under this settlement, the company has paid $2.8 million to resolve the investigation. Medtronic denies any wrongdoing, and makes no admission that any of its activities were improper or unlawful. Medtronic is committed to following appropriate marketing and reimbursement practices at all times, and for many years has had in place a comprehensive and robust employee compliance program.”

This article appeared in print in the February 9th, 2015 edition of Hamodia.