Bone growth products like Stryker’s OP-1 and Medtronic’s InFuse have been shown to create new bone in humans. The products have also created significant adverse events for the companies that produce them.
Michael LoucksThe most recent adverse event involving Stryker’s OP-1 is an October 28 federal grand jury indictment in Boston. The indictment accused the company’s biotech division and four current and former executives of promoting the product without approval and lying to the FDA about the number of patients treated under a Humanitarian Device Exemption (HDE) program.
Michael Loucks, acting U.S. attorney in Boston, also accuses the company and its senior managers of participating in a fraudulent marketing scheme to pump up sales of OP-1 by lying to doctors, providers and payers about FDA approval.
Cigars, Tootsie Rolls and Vienna Sausages
Specifically, the government says the company promoted OP-1, “in a manner that was different from its FDA approved use; namely they promoted a combination of the devices with a bone void filler, called Calstrux, and in furtherance of that promotion provided ‘recipes’ to surgeons, medical technicians and others as to how to mix the OP-1 products with Calstrux.”
The government says the reason the company promoted a combination of the products was to overcome a competitive disadvantage with other legal products, such as InFuse.
It is alleged that some of these “recipes” called for medical personnel to mold the combined product into “cigars, ” “tootsie rolls” or “Vienna sausages.” The indictment charges that the defendants knew that such a combination had never been studied in a clinical trial and had never been presented to or approved by the FDA.
More on those recipes later.
Stryker’s Response
Following the announcement of the indictments, Stryker made three announcements of its own.
First, the company issued this statement on the day of the indictment:
The Company is disappointed with this action and still hopes to be able to reach a fair and just resolution of this matter. Conviction of these charges could result in significant monetary fines and Stryker Biotech’s exclusion from participating in federal and state health care programs, which could have a material affect on Stryker Biotech’s business. As a matter of Company policy Stryker will not have any further comment on these allegations.
Two days later, Stryker announced that John Brown will be retiring as Chairman of the Board as of December 31, 2009, and that he would be replaced by current company President and CEO Stephen MacMillan. The company then announced that it will be paying shareholders their dividends quarterly instead of annually.
Polly Exoneration?
David Polly, MDThe indictment may also become an adverse event for Iowa Senator Chuck Grassley.
Senator Grassley recently accused University of Minnesota Spine Chief and InFuse consultant David Polly, MD, of lying to his IRB (Institutional Review Board) about his choice of InFuse for a clinical study. OK; the senator didn’t actually call Dr. Polly a liar. He said Dr. Polly was being “less then truthful, ” when the physician told his IRB that InFuse was the only commercial off-the-shelf product available for his study.
Dr. Polly’s lawyer, John Lundquist, being a good fellow Midwesterner, didn’t actually call the senator “ignorant, ” but told OTW after the announcement of the Stryker indictment:
Senator Grassley“As Dr. Polly and the Department of Justice agree, OP-1 had not been approved for marketing, but could be used only pursuant to the “highly restrictive” Humanitarian Device Exemption (HDE). The events today thus confirm that Dr. Polly spoke entirely accurately about OP-1…. It is now possible to understand how the senator had been mistaken in his earlier pronouncements.”
Senator Grassley’s office did not respond to repeated inquiries from OTW asking if the senator had changed his mind about accusations against Dr. Polly.
Stryker’s OP-1 Drama
This latest chapter of the OP-1 drama follows an FDA warning letter last year to the company’s biotech unit. That letter included the charge of falsification of hospital-approved documents which allowed limited use of the product. It was followed by an FDA orthopedic panel recommendation earlier in the year that OP-1 should not be approved by the FDA as a device that promotes fusion.
The OP-1 warning, among three other FDA warning letters at other Stryker facilities, has caused Stryker to undergo a massive $200 million quality control overhaul as well as appointing a new quality chief.
There is some good news, however, for Stryker on the FDA front.
During a recent quarterly conference call with Wall Street analysts, the company announced that the OP-1 FDA warning letter had been lifted. Vice President for Strategy and Investor Relations Katherine Owens told analysts, “Not surprisingly, we’ve received numerous inquiries regarding the plant in this program going forward, following the disappointing FDA panel outcome earlier in the year. Given the extent of development that we have done to date and potential applications for OP-1 in other indications such as soft tissue, we are undergoing an intense review on our various strategic options.”
Inside the Indictments
But back to the indictments.
There are three products at issue in this case: OP-1 Implant, used to promote growth in long bone non-unions; OP-1 Putty, used to promote bone growth in certain, very limited spinal fusions; and Calstrux, a bone-void filler for surgically created bone defects or bone defects resulting from traumatic injury.
Stryker had various levels of FDA blessing to use each of these products separately for their narrowly intended purposes. What the company did not have was permission from the FDA to use the OP-1 products mixed together with the bone-void filler.
OP-1 Humanitarian Approvals
The FDA granted Stryker HDEs for the OP-1 Implant in October 2001 and the OP-1 Putty in April 2004.
An HDE is similar to a PMA (Premarket Approval) application, but it is exempt from the effectiveness requirements of the PMA. The product must demonstrate that it is safe, has no comparable competitors in the market, treats a condition that affects fewer than 4, 000 individuals in the U.S., and is approved by an IRB.
According to the indictment, shortly after the introduction of the products, surgeons complained to the company that OP-1 handled poorly (like wet sand) and did not provide enough product volume.
Calstrux Filler
In response to these complaints, prosecutors say Stryker developed Calstrux (TCP Putty), a product with a malleable, Silly Putty-type consistency that the company intended to be mixed with OP-1 products as a “carrier” or extender to increase volume and improve handling qualities of OP-1.
The government alleges that Stryker, despite intending to use Calstrux as a mixture with OP-1, only applied to the FDA for 510(k) clearance for Calstrux as a bone-void filler. Clearance was granted by the FDA on August 26, 2004, with no provision for allowing it to be mixed with any bone growth products.
After the Calstrux clearance, Stryker never conducted any clinical trial in a human to determine whether the mixture of the bone-void filler with OP-1 was safe and effective for humans, and no labeling for that use was ever developed.
The government says the defendants, former Stryker Biotech President Mark Philip and current sales managers William Heppner, David Ard and Jeff Whitaker, all knew this.
OP-1/Calstrux Launch
In early 2005, despite knowing there was no FDA approval for mixing the products, the defendants, in a company-wide launch, allegedly presented Calstrux to the sales force as a “carrier” or “extender” for the OP-1 products, and Philip noted the availability of Calstrux should “accelerate” the sales of OP-1.
Stryker allegedly promoted the products to surgeons and surgical staffs in the same manner, and the vast majority of Calstrux sales were for mixing with OP-1 products.
The defendants allegedly promoted “recipes” on how to mix the products that recommended forming the combination into “cigars, ” “tootsie rolls, ” “logs, ” “bricks, ” or “Vienna sausages” among other shapes.
Adverse Events
By mid 2005, the company began receiving reports of adverse events arising from the combination.
One sales rep, according to the indictment, wrote senior management:
Like any product, if we have 30+ people doing something different with regard to mixing, dosing, etc., we are going to see different results.
Some of the results included inflammation, drainage and impaired wound healing. Some of the patients needed revision surgery where surgeons observed that the mixture had migrated from the site and looked like “oatmeal, ” “grits” or “white sesame seeds.” Some patients suffered from unwanted bone growth and had to have the growths removed.
Stryker asked a surgeon using OP-1 in early 2006 to prepare an analysis of the patients who had been treated with the mixed product. That report allegedly concluded that patients with the mixed product had an adverse event rate “higher than the norm.” Later in the year, the same surgeon, according to the indictment, told the company that the mixture of OP-1 and Calstrux was not effective.
Internal Warnings Ignored
At around the same time in early 2006, prosecutors say a senior manager at the biotech division sent a memo about the mixture to Philip expressing concerns over adverse events, the wide variety of “recipes” and improper promotion of the products. He recommended that the company send out a “dear doctor” letter advising surgeons about the adverse effects.
Heppner and Whitaker are accused of arguing against this because such disclosure would “harm sales, anger surgeons who had been misled because ‘many surgeons are just handed the product prior to implantation and think its all OP-1’ and cause IRBs to cease all OP-1 usage, ” according to the indictment.
The government says that despite knowing this, Philip, the company and the sales managers continued to promote the allegedly illegal mixture for two more years until February 2008, without informing surgeons of the side effects, to keep sales rolling.
Financial Scheme
The purpose of this scheme, according to the indictment, was to “obtain millions of dollars in sales from OP-1 and Calstrux.”
Hospitals paid approximately $5, 000 for each unit of OP-1 Implant and $5, 250 for the OP-1 Putty (the putty’s higher cost was for a vial of carboxymethylcellulose).
To meet increased sales quotas, outlined in the indictment, prosecutors say the defendants had to lie to the FDA about the number of patients being treated under the HDE approvals.
The company was obligated to submit annual reports regarding OP-1 Putty to the FDA on the number of devices that had been shipped or sold and, if the number shipped exceeded 4, 000 in any year, provide an explanation and estimate of the number of devices used per patient, and the number of patients treated.
Stryker reported that each revisionary posterolateral spine fusion surgery (the HDE approved use) involved use of two units of OP-1 Putty per patient, one for each side of the patient’s spine.
However, says the indictment, in part owing to the cost, two units were rarely used and most sales were of one unit per patient per surgery.
Stryker concluded in a 2005 analysis that it was selling approximately 1.3 units of Putty per patient. Based on that usage, prosecutors say Stryker could only sell approximately 5, 000 units of the Putty per year (4, 000 patients x 1.3 units/patient = 5, 200 units). However, the indictment says that Stryker undertook to sell more than the allowed amount. Selling an additional 1, 000 units of the Putty would generate additional annual revenues of $5 million.
In 2007, Stryker reported to the FDA that it sold 6, 234 units of the Putty. “Since 2 units of OP-1 Putty are used per patient, it is estimated that 3, 117 patients have been treated, ” said the Stryker report. In fact, say prosecutors, the company knew that less than two units were used per patient and that more than 4, 000 patients had been treated during the year.
The government says that Philip attempted to conceal the actual number of patients treated by trying to get a law firm to issue a “bogus” legal opinion and allegedly asking a colleague to say that the company had no way to track the per patient use of OP-1 Putty in a conference call with management at the parent Stryker Corporation.
Aftermath
Mark Philip self-surrendered on October 28 and appeared in court. He was released on standard conditions and surrendered his British passport. His arraignment was set for Friday, October 30 in front of Chief Magistrate Judge Judith Dein.
If convicted of the charges, Stryker Biotech faces fines of $500, 000 or more and possible exclusion from public healthcare programs. Philip, Heppner, Ard, and Whitaker each face up to 20 years imprisonment and a $250, 000 fine.
Whether or not this indictment is the last adverse event for Stryker and OP-1 is hard to know. But bone growth products like InFuse and OP-1, have shown themselves be able to grow controversy for their makers as they have shown themselves able to grow bone in humans.
