New Infuse Scandal Could Hit Medtronic Hard, Analyst Says

A Wall Street analyst says the furor over the most recent <"">Medtronic Infuse scandal could cause the device maker to exit the spine business. According to a Forbes report, Larry Biegelsen of Wells Fargo said the Infuse controversy could sour hospitals and doctors on the product, causing a drop in sales of 30 to 50 percent in fiscal 2012.

Last week, we reported that The Spine Journal had taken the unprecedented step of devoting an entire issue to Infuse (aka recombinant human Bone Morphogenetic Protein or rhBMP-2), revealing that many Medtronic-funded studies of Infuse downplayed its association with serious side effects, including male sterility, infection, bone loss and unwanted bone growth. At the same time, Medtronic failed to disclose that it had paid many of the researchers who conducted those studies millions of dollars in consulting fees.

According to Forbes, Biegelsen said these latest Infuse disclosures could trigger litigation. Considering that 900,000 people have received Infuse since it came on the market, any litigation could be massive. Biegelsen said settlements in potential Infuse class action lawsuits could cost Medtronic as much as $1.2 billion.

Of course, as anyone who reads this blog knows, this is just the latest controversy to erupt over Infuse. In July 2008, the Food & Drug Administration (FDA) warned that the use of Infuse Bone Graft and similar products had caused serious problems when they were used off-label in cervical spine (neck) surgeries. Patients reported difficulty swallowing, breathing and speaking. Several required emergency treatment, including tracheotomies and the insertion of feeding tubes, as well as second surgeries.

In 2009, a surgeon at the U.S. Army’s Walter Reed Hospital was accused of falsifying data for Medtronic-paid Infuse study involving wounded soldiers. That same year, questions were raised concerning another Infuse study at Walter Reed, and whether soldiers involved in it had given informed consent before spine surgery.

The U.S. Senate Finance Committee has been investigating Infuse for several years, and recently demanded Medtronic turn over records detailing payments made to Infuse researchers. Meanwhile, the U.S. Justice Department is investigating off-label use of Infuse.

In the end, The Spine Journal revelations could lead to even more Infuse investigations, and even an FDA safety review. All of that, along with the possible emergence of class action lawsuits, could force Medtronic to pull Infuse from the market, or even sell its spine business, Biegelsen said.

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