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Off-label uses of medical devices are often promoted by medical device manufactures, even though illegal as a means of generating additional revenues. According to a recent Pioneer Press news report, a whistleblower lawsuit alleges that Medtronic violated federal and state laws by selling medical devices for use in blood-vessel procedures when the products had been approved only for use in bile ducts a less risky application.

Unsealed last week in the U.S. District Court of Massachusetts, the lawsuit alleges that Medtronic Chief Executive Bill Hawkins played a key role in deciding to sell the products, known as biliary stents, for uses that had not been approved by the FDA.

“Despite clear knowledge of its illegality, Medtronic has explicitly designed and promoted its biliary stents for off-label, unapproved vascular use,” said the lawsuit from Enda Dodd and Tricia Nowak, both of whom worked in Medtronic’s stent division in California.

Earlier this year, another whistleblower lawsuit involving biliary stents was unsealed in a federal court in Texas; in that case, several Medtronic rivals were named as defendants, including Natick, Mass.-based Boston Scientific, which also has significant Twin Cities operations.

In 2008, Medtronic, Boston Scientific, Illinois-based Abbott Laboratories and New Jersey-based Johnson & Johnson all disclosed that they had been subpoenaed by federal investigators regarding the marketing of stents used in the bile duct.

Biliary stents are metal or plastic flexible tubes used to prop open the bile duct in patients withpancreatic cancer. The treatment helps relieve pain by draining the biliary tract and keeping the duct open, but federal regulators in 2007 started questioning whether companies had been promoting the devices for unapproved “vascular” uses in blood vessels.

Biliary stents are Class II devices, meaning they are relatively low-risk products. Vascular stents, on the other hand, are higher-risk Class III devices and therefore can’t be approved without a higher level of testing and clinical study data, the lawsuit states.

In the lawsuit, Dodd said he was asked to examine potential quality problems with the biliary stents after his arrival at the California division in 2003. He was “alarmed,” the lawsuit said, to learn the stents had in fact been developed for use in blood vessels.

Dodd claims he pushed for the company to obtain a higher-level approval from the Food and Drug Administration for the products a certification that would match how the products actually were being used by doctors. But he claimed he was thwarted.

Medtronic saw more than $15 million in “mostly off-label” sales of biliary stents during fiscal 2008, the lawsuit claims. The company posted overall revenue of $13.1 billion for fiscal 2008.

On October 29, 2009, pharmaceutical giant AstraZeneca revealed that it had reached a $520 million agreement to settle two federal investigations and two whistle-blower lawsuits over the sale and marketing of its blockbuster psychiatric drug Seroquel. One of the investigations related to “selected physicians who participated in clinical trials involving Seroquel,” AstraZeneca disclosed in a government filing. The other case related to off-label promotion of the drug.

As a result of aggressive marketing, Seroquel has been increasingly used for children and elderly people for indications not approved by the FDA. Doctors are permitted to prescribe any approved drug for off-label uses.

Seroquel was the top-selling antipsychotic drug in America. It had $17 billion in sales in the United States since 2004, according to IMS Health, a research firm.

Tony Jewell, a company spokesman, declined to be more specific about the physicians or clinical trials under investigation. He said the company was in final negotiations to settle the whistle-blower suits and reach a corporate integrity agreement with the Justice Department.

The name of the whistle-blowers and other details of the suits remained sealed in federal court.AstraZeneca, based in Britain, joins a list of drug makers that have paid billions to settle inquiries initiated by complaints from former company insiders.

Earlier this year, Eli Lilly & Company paid $1.4 billion over its marketing of Zyprexa, another antipsychotic drug. And Pfizer announced it would pay $2.3 billion, including a record $1.195 billion criminal fine, mostly over its painkiller Bextra, which has been withdrawn from the market.

AstraZeneca disclosed the settlement in a financial report. Third-quarter revenue rose 10 percent, to $8.2 billion, and operating profit rose 29 percent, to $3.6 billion, at constant exchange rates over the year-earlier quarter.

AstraZeneca also said it had been served with 14,444 civil lawsuits over the drug as of October 9, 2009.

The SEC on September 128, 2009 accused a Detroit stock broker of luring more than 800 mostly elderly investors into a multi-million dollar Ponzi scheme by convincing them to refinance their homes to make securities investments.

The civil lawsuit, filed in federal court in Michigan, alleges that 59-year-old Frank Bluestein acted as the single-largest salesperson in a massive $250 million Ponzi scheme the SEC shut down in 2007 after charging Edward May and E-M Management Company LLC with fraud.

That case, which is still being litigated, represented one of the largest Ponzi cases the SEC had ever brought until the multi-billion-dollar Bernard Madoff and R. Allen Stanford Ponzi scheme cases.

The SEC doesn’t allege that Bluestein knowingly solicited senior citizens to invest in a Ponzi scheme. But the agency says he failed to conduct due diligence before telling seniors that E-M securities were safe, low-risk investments.

The SEC also alleges that Bluestein failed to disclose $2.4 million in commissions he received from May and E-M on top of the $1.4 million in disclosed compensation he received for his own company, Fast Frank Inc.

“Bluestein convinced elderly investors to refinance their homes to invest in securities that he falsely claimed were safe,” said Merri Jo Gillette, the director of the SEC’s Chicago regional office. “His lies, false assurances and unscrupulous tactics put many investors at risk of losing not only their life savings, but also their homes.”

The SEC said that Bluestein managed to raise about $74 million from investors by selling E-M securities between 2002 and 2007. The SEC filed suit against E-M and May, its operator, in November 2007, saying that E-M sold shares of limited liability companies by telling investors the companies had lucrative telecommunication contracts with Las Vegas resorts and casinos.

Those contracts, the SEC said, never existed. An SEC enforcement official said May has consented to a permanent injunction in court, but is still litigating over monetary penalties and disgorgement.

The latest charges in the case allege that Bluestein conducted investment seminars for seniors in Michigan and California. He operated his branch office through a private company he co-owned called Maximum Financial Group Inc.