Medtronic whistleblowers suing company for fraud

6:54 AM, Feb 25, 2010   |    comments
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FRIDLEY, Minn. - Minnesota-based Medtronic is facing a lawsuit in Federal Court for allegedly committing fraud in the lucrative medical "stent" market.

The action is similar to lawsuits filed against Boston Scientific, Abbott and Johnson & Johnson involving hundreds of thousands of patients. It may also be part of a larger federal investigation of the medical stent business.

The multi-count lawsuit, filed in U.S. District Court in Boston, Massachusetts on behalf of 22 states and the District of Columbia, claims that Medtronic "unlawfully and unabashedly developed, marketed and promoted its biliary stent medical devices for uses unapproved by the Food and Drug Administration."

A "biliary" stent is a tubular device designed for use in maintaining flow in bile ducts of the liver or pancreas. It is specifically for use in very ill cancer patients. It is not intended as a "cure" and is considered short-term.

Biliary stents are "Class II" medical devices which do not require the extensive and expensive testing and approval process of "Class III" medical devices such as "vascular" stents, which are placed in blood vessels and expected to last many years.

They can be a "cure" for vascular disease or blockage, but they must endure the more rigorous pulsating action of blood vessels, as opposed to the more gradual flow of a bile duct.

The lawsuit, by two former Medtronic employees in California, claims that the medical electronics giant was deliberately by-passing the much tougher federal regulations on vascular stents, by promoting and selling the biliary stents for use in vascular placements.

The vascular stent market is far more lucrative since there are potentially millions of candidates for vascular stents, while only 50,000 or so might need the biliary variety in a year.

The two "whistle-blowing" Medtronic workers claim they were fired because they complained to Medtronic officials, including now CEO Bill Hawkins, about the alleged fraudulent practices. Since, Federal Programs including Medicare and the Veterans Administration are Medtronic stent customers, the lawsuit charges the Fridley company with fraud.

Medtronic would not comment today on the firing of the former employees, Engineer Enda Dodd and Salesperson Tricia Nowak.

The company did issue the following statement: "Medtronic is aware of a complaint alleging that it unlawfully promoted its biliary stents for off-label uses. Medtronic intends to vigorously dispute these allegations, including filing a motion to dismiss the case. Beyond that, we do not comment on current litigation."

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