Dismissed Spine Devices Lawsuit Against Medtronic Is Back

A False Claims Act lawsuit against Medtronic Inc. and related entities is back.

The plaintiff in this matter formerly worked for Medtronic and filed the initial lawsuit in 2015. In 2019, the entire case was dismissed. The plaintiff then appealed the dismissal of its False Claims Act lawsuit against Medtronic. A three-judge panel affirmed in part and reversed in part.

The lawsuit alleged that Medtronic fraudulently obtained U.S. Food and Drug Administration (FDA) clearance for certain devices used in spinal fusion surgeries, “unlawfully marketed” the devices for “off-label and contraindicated use,” and “illegally compensated physicians” to use the devices. The plaintiff also claimed that these alleged fraudulent activities caused physicians to submit false claims to Medicare.

First, the court affirmed the district court’s dismissal of the plaintiff's claim based on off-label and contraindicated labels. Plaintiff argued that Medtronic marketed the devices for use in the cervical spine, claiming an “off-label” use in violation of federal law.

In its decision the court stated that the “federal government has recognized that doctors may use medical devices for off-label purposes as long as it is medically necessary and reasonable.” The court explained that to be reimbursable, a device must “have FDA approval/clearance” and “be reasonable and necessary.” Here, the court explained, the devices did have FDA clearance and the plaintiff has not “plausibly alleged” that the devices were not “reasonable and necessary.”

Next, the plaintiff alleged that Medtronic defrauded the FDA into granting the devices Class II clearance. The opinion divided the devices into two categories, extra-use devices and contraindicated-only devices.

The contraindicated-only devices are allegedly those that “cannot be used for their labeled intended use and can only be used for their contraindicated use in the cervical spine.” Plaintiff claimed that “Medtronic falsely represented in its clearance application that they were intended for use in the thoracolumbar spine (the part of the spine below the neck) when in fact they could not be used there and could only be used in the cervical (neck-area) of the spine.”

The court then reversed the district court’s dismissal of claims based on the contraindicated-only devices. The court stated, "These considerations—intended use, similarly to a predicate device, and different questions about safety—are precisely those that the FDA considers in granting Class II certification."

Lastly, the court affirmed the district court’s dismissal of the plaintiff's Anti-Kickback Statute claim. It stated that the plaintiff failed to explain how Medtronic’s rebate agreement with hospitals to buy the devices violated the Anti-Kickback Statute. Furthermore, the court was not persuaded by the plaintiff's “general allegations” that Medtronic remunerated physicians by paying costs connected to certain “business development events.”

This matter remains ongoing. Medtronic’s deadline to file its petition for panel and/or en banc is May 17, 2021.