West Virginia Pipe Trades Health & Welfare Fund v. Medtronic, Inc.

845 F.3d 384 (8th Cir. 2016)

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Nature of the Case

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Facts

D developed INFUSE as an alternative to bone grafting procedures, and the FDA approved it for use in lower back spinal fusion surgeries. In the INFUSE procedure, the vertebrae are fused using a thimble-shaped titanium cage containing an INFUSE-soaked collagen sponge. INFUSE is a key component of Medtronic's multi-billion dollar spinal segment. D sponsored the FDA clinical trials. All thirteen of the resulting articles included authoring physicians who had financial interests in INFUSE. The FDA approved INFUSE only for use in lumbar spinal fusion surgeries, some dental surgeries, and for treating certain shin fractures. Up to eighty-five percent of INFUSE use was off-label. In 2008, the FDA issued a public health notification associating off-label uses of INFUSE with life-threatening throat and neck swelling. Articles expressed concern that the doctors authoring the D-sponsored INFUSE clinical studies had significant financial ties to D and reported test results twice as favorable as those of independent studies. Independent studies began to surface regarding serious side effects. The original studies did not report any adverse events despite the incidence of retrograde ejaculation. Many began to conclude that the conflict of interest was the only explanation for the difference between the studies. The Senate Finance Committee issued a press release announcing an investigation into D and INFUSE. The press release expressed concern over Medtronic's undisclosed financial ties with doctors. The Committee found that D 'was heavily involved in drafting, editing, and shaping the content of medical journal articles authored by its physician consultants who received significant amounts of money through royalties and consulting fees from D.' Ps filed suit on June 27, 2013, against D, its officers and senior managers, and the doctors who authored the Medtronic-sponsored clinical studies. Ps alleged a number of securities laws violations, including making false statements and employing a scheme to defraud the market. D eventually moved for summary judgment on all claims. The district court granted the motion, holding that the two-year statute of limitations barred all claims. Ps appealed.