Medtronic, Inc., sales have continued to decline after months of skepticism surrounding some of their products and practices. The company is experiencing a particularly bad quarter with regards to implantable heart defibrillators and spine products, which are two of their best sellers. According to Reuters, sales in both of these areas have fallen 9 percent in the third fiscal quarter.
Medtronic is the world’s largest independent medical devices manufacturer. The company came under scrutiny last year due to Infuse, a bone graft product used to promote growth in certain areas of the spine. Infuse incorporates recombinant human bone morphogenetic protein (rhBMP-2), a synthetic recreation of a protein that is naturally available in the body. Originally, the product seemed like an innovative alternative to the traditional spinal fusion procedure, in which bone is used from the hip. However, the product became controversial when Spine Journal, the publication of the North American Spine Society (NASS), published an article revealing potentially dangerous complications and unorthodox practices.
Overall, the June 2011 issue of the Spine Journal indicated that Infuse has potentially dangerous side effects, which doctors allegedly knew about but did not report. The potential side effects of Infuse may include male sterility, swelling of the neck, difficulty breathing, infection, increased leg and back pain and cancer. According to Reuters, Infuse sales dropped about 17 percent following Spine Journal’s June publication.
Infuse took another hit when Dr. Eugene Carragee, the editor-in-chief of Spine Journal and author of the June 2011 article, revealed that yet another study he authored had raised serious concerns that rhBMP-2 in high doses could increase cancer risks. “Almost certainly this is cancer promoting and not a carcinogenic, he told Reuters at the Time, explaining that in this case, the risk is significantly greater than that of a carcinogen. Dr. Carragee presented his findings at the annual North American Spine Society meeting in October 2011. His data indicated that patients who use these products are 2.5 times more likely to develop cancer in one year and 5 times more likely after 3 years.
Shortly following this development, the U.S. Senate committee began to investigate financial ties between doctors and Medtronics. The investigation was conducted in an attempt to determine whether or not doctors were paid to knowingly understate the risks of Infuse. Furthermore, the U.S. Department of Justice launched an investigation in response to suspicions of off-label marketing. According to ABC News, this constitutes 85% of its use. ABC News reports that Infuse has been used by over 2,300 surgeons in over 500,000 patients.
More recently, Medtronic’s decrease in sales may have also been influenced by other factors such as a straining global economy. Financial restraints have caused governments to reduce healthcare funding. As a result, fewer patients are able to visit the doctor, let alone afford a costly surgery.
Yesterday, Medtronic stocks dropped to $39.90 a share, a decline of 2.6 percent. Regardless, it appears that Medtronic is not planning to sell their spine units. The Chief Executive Officer Omar Ishrak acknowledges the current setback, stating to Reuters, “The year-over-year decline is not sustainable. We urgently need to see signs of improvement.” He went on to say, “We realize that despite everything, we’re still positioned well in spine. Overall it is still an attractive market and we are leaders in that market. We are still in the best position to grow and make a difference,”