Bloomberg News

Ex-Synthes Officials Get Prison Terms in Bone Drug Case

November 23, 2011

(Updates with prison sentences in first paragraph.)

Nov. 21 (Bloomberg) -- Three former Synthes Inc. executives were sentenced to prison terms ranging from five months to nine months each for their roles in the unapproved trial of a bone- cement drug in which three patients died.

U.S. District Judge Legrome Davis sentenced Michael Huggins and Thomas Higgins to nine months in jail. He sentenced John Walsh to five months in jail. Another executive, Richard Bohner’s sentencing hearing was continued indefinitely after his lawyer collapsed in the courtroom and had to be escorted out by paramedics.

All four men pleaded guilty in 2009 to misdemeanor counts of violating the responsible corporate officer doctrine of the Food, Drug & Cosmetic Act. Sentencing guidelines called for prison terms of as much as six months. Huggins was taken immediately into custody. Davis gave Higgins, who has an ailing wife, two weeks to surrender to prison officials. Walsh, whose daughter turns seven today, was given until Nov. 28 to report.

“This is shameful behavior,” Davis said during the abbreviated hearing for Bohner. “There is no credit here that belongs to anyone.”

Synthes, the world’s largest maker of bone-related medical devices, its Norian Corp. unit, and the four officers were indicted in June 2009 over claims they conspired to conduct unapproved clinical trials of Norian-branded cements from May 2002 to late 2004.

The cement, approved for elsewhere in the body, was used in the spines of 200 patients with fractured vertebrae. Three patients died from a rapid drop in blood pressure during spinal surgeries, prosecutors said.

Synthes Pleaded Guilty

West Chester, Pennsylvania-based Synthes agreed to plead guilty, sell the Norian unit and pay a $23.5 million fine to settle the case. The agreement allowed the company to keep operating in the U.S. without its products being banned from Medicare reimbursement programs.

Johnson & Johnson agreed to buy Synthes in April for $21.3 billion to become the leader in the $5.5 billion market for devices to treat trauma victims. Synthes has 50 percent of the market for sales of screws, plates, bone grafts and other products to treat skeletal injuries.

In the court case, prosecutors accused Synthes executives of bypassing U.S. Food and Drug Administration approval of the clinical trials, knowing that the Norian XR and Norian SRS cement products posed significant risks. Spinal surgeries were performed in the trials although an FDA-cleared label for Norian XR warned against such use, prosecutors said.

Blood Clots

The company marketed the cement for spinal fractures even after pilot studies showed it caused blood clots that could become lodged in the lungs. Huggins and the other executives promoted the drug through the use of test markets aimed at persuading surgeons to publish the results of their surgeries, according to court documents.

Norian and Synthes conducted the clinical trials at various hospitals across the U.S. after approaching selected spine surgeons about using the products, prosecutors said. Norian conducted two XR “Test Market Kick-Off” surgeon meetings and one surgeon forum from August 2003 through mid-January 2004, training about 52 spine surgeons, prosecutors said.

Official Inspection

The company canceled the forums after the third patient died in January 2004 but rejected the idea of recalling or removing XR from the market, prosecutors said. The executives then lied to the FDA during an official inspection in May and June 2004, according to court documents.

Lawyers for the men argued at a hearing in June that they should be given additional credit for taking responsibility for the offense. All four deny they acted with criminal intent.

Huggins reported directly to Synthes’ chief executive officer. Higgins served as president of the company’s spinal division and was the most hands-on of the officials charged, Crawley said.

Walsh, the former director of both regulatory and clinical affairs, was hired by Bohner, who served as vice president of operations from January 2002 through 2005, according to court documents.

The case is U.S. v. Norian Corp., 09-00403, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).

--Editor: Mary Romano, David E. Rovella

To contact the reporters on this story: Sophia Pearson in Philadelphia federal court at spearson3@bloomberg.net; Phil Milford in Wilmington, Delaware at pmilford@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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