Norian: A Human Experiment Called a Test Market

Synthes agreed to pay $138,000 to settle allegations that Norian bone cement promotion caused false federal claims or purchases for procedures involving 31 beneficiaries. The court’s criminal-case findings describe warnings from the company’s regulatory staff, its medical consultant and its own safety studies. Synthes proceeded with a program that used patients to answer the safety questions it had already been told to investigate.

Norian manufactured bone cement, and Synthes acquired the company in 1999. A federal court’s findings in the criminal case trace the decisions through emails, management meetings, surgeon interviews and the Food and Drug Administration inspection. The separate civil settlement agreement connects allegedly false safety and efficacy representations to procedures involving Medicare, TRICARE and Department of Veterans Affairs beneficiaries.

Why Norian’s Spinal Market Was Different

Norian’s bone-filler clearance did not cover the vertebral compression-fracture procedures Synthes wanted surgeons to perform. The court’s criminal-case memorandum explains that Norian SRS and XR eventually received clearance as general bone void fillers in the spine, but neither was cleared for load-bearing applications or procedures such as vertebroplasty and kyphoplasty.

The distinction was in the function of the cement. Filling a bone void that did not affect the stability of the bone was within the cleared use. Using cement to stabilize a fractured vertebra was the market Synthes pursued. The presence of the word spine in a clearance did not answer whether the cement could do that job.

The court found that Food and Drug Administration officials made the boundary explicit in a May 2002 call with Synthes. They required labeling that excluded load-bearing uses such as vertebroplasty. Synthes said it would not promote XR for those uses without the appropriate clearance. The XR label subsequently warned against treatment of vertebral compression fractures.

The earlier SRS label also warned against mixing the cement with another substance. Yet the test-market program began with SRS mixed with barium sulfate, before moving to XR and a rotary mixer.

The Safety Information Came First

The government’s account in the criminal-case announcement said pilot studies had shown blood-clotting risks before the marketing program began. The cement reacted with human blood in a test tube to cause clots. Animal testing showed cement-related clots lodging in a pig’s lungs.

The court memorandum supplies the internal response. A researcher reported that the pig’s pulmonary artery system had clotted off and called for further investigation. The court found that the president of Synthes North America knew about the potentially lethal risk. In a subsequent email, the executive questioned shipments for spinal use and said the company needed a real study with proper protocols.

A Synthes medical consultant made the same point more sharply in a June 2002 email about giving surgeons SRS without a controlled protocol:

The court found that the senior executive received that warning almost immediately. The consultant also wrote separately to the executive and the chief executive officer. The concern had reached the people who could decide whether the program continued.

The Test Market Was the Decision

Synthes considered a formal clinical study and chose a test market instead. According to the court’s criminal-case findings, senior executives knew the required investigational device exemption would take about three years and a million dollars, costing the company its competitive advantage. At a November 2001 meeting, management rejected that route and planned for a few sites to perform 60 to 80 procedures and help publish the results.

The commercial purpose was part of the criminal charge. Prosecutors alleged that the company wanted to reach the market before competitors and generate published studies it could later use to persuade other surgeons to use XR for vertebral compression fractures. The proposed publications would help sell the use the company was supposed to be testing. The court found that the XR market-introduction plan projected first-year after-tax profit at 35 times the cost of raw materials.

The court traced the program into a July 2003 safety meeting. Participants considered abandoning the project because it was too unsafe. They chose to proceed. A presentation explained what the test market was expected to resolve:

The presentation put the sequence in plain sight: use the product in people, observe the complications, then decide how much risk the company would accept. In testimony described by the court, the Food and Drug Administration inspector explained that a test market gathered usability information for cleared indications. Synthes was using its program to evaluate safety and efficacy.

Product-development staff selected sites partly for their interest in publishing. Sales managers selected others, and surgeon training was part of the expansion. Patients bore the safety risk while the company built a route to customers.

What Surgeons and the FDA Were Told

The court’s criminal-case findings describe deaths during procedures using the cement, missing information in adverse-event reports and a misleading account to the Food and Drug Administration.

After a January 2003 death during a procedure using SRS mixed with barium sulfate, no medical device report was filed. A report followed a September death during spinal surgery using XR, but it omitted that the procedure was vertebroplasty or kyphoplasty using XR. The missing detail was the very use the company was testing.

The product manager’s interviews reached management too. One surgeon said he had thought the company had much greater clinical experience and that a sales consultant had pushed the product. Another urged the company to involve hospital review boards and the Food and Drug Administration. Management nevertheless decided to continue the experimental use.

After a third patient died during a procedure in January 2004, Synthes canceled surgeon-training events. A subsequent letter told the selected surgeons that the cements should not be used for vertebral compression fractures. The court found that the letter omitted the earlier deaths, the blood-clotting warnings and the agency’s prior warning against that use.

When the Food and Drug Administration inspected Synthes later that year, the account changed again. The court found that executives falsely said no clinical trials had occurred, that the test market covered only cleared indications and that the company had not trained surgeons to use the cements. Internally, the company had selected sites, discussed complication rates and expanded training. Externally, it denied conducting the program those records described.

From Surgeon Use to Federal Claims

The civil settlement addressed allegations that false safety and efficacy representations caused federal claims or purchases for Norian XR and SRS procedures. The government alleged that the vertebral compression-fracture use was not reasonable and necessary and that XR’s label warned against it. Medicare, TRICARE and the Department of Veterans Affairs were the programs allegedly left with the bill.

That allegation follows the way the device business works. The physician may choose or strongly influence the product, while the hospital buys it and receives payment for the procedure. Medicare usually includes the device in the procedure payment. The manufacturer’s sales decision can therefore sit upstream of a claim submitted by the provider.

The operating-room representative is part of that commercial chain. A Senate Finance Committee staff report describes representatives ordering, delivering and stocking products and assisting surgeons in the operating room. Product training and support put the manufacturer’s people close to the decision to use the device. In Norian, the court’s account of the surgeon interviews shows why what the sales force said mattered alongside what the label said.

A 2020 paper in the Journal of Forensic and Investigative Accounting examines whether a false statement had the practical effect of inducing wrongful government payment in a False Claims Act case. Applied to Norian, that means following the safety pitch through the surgeon’s decision to the procedure and the health care provider’s claim.

The same manufacturer-to-provider connection appears in the Acclarent civil settlement. The government alleged that marketing a sinus spacer for unapproved drug delivery caused healthcare providers to submit false claims.

The Norian Bone Cement Guilty Plea

On October 4, 2010, the Justice Department announced filed agreements for Norian to plead guilty to one felony conspiracy charge and 110 misdemeanor device-shipping charges. Synthes agreed to plead guilty to one misdemeanor shipping charge.

What Evidence Is Needed to Prove Fraud?

We work with device insiders to connect what the company said and knew to the use of the product and the government claim that followed. Norian shows how much of that connection can live in ordinary business records: a regulatory email, a market-introduction plan, a safety-meeting presentation, a product manager’s surgeon interviews and the company’s written response to an inspection.

The sequence gives those records their force. The safety information reached management before later decisions to expand. The company selected surgeons and planned training while discussing the risks. Its account to the Food and Drug Administration then contradicted its internal account. A warning and the decision made after it can reveal more than either document alone.

For a civil whistleblower case, we work with the insider to connect those decisions to the procedures, the representations that influenced them and the federal payment sought. A sales employee may recognize the training program. A clinical or regulatory employee may recognize the warning that disappeared from the surgeon’s version. The hospital’s procedure and billing records can supply the next part of the story.

How Much Does a Medicare Fraud Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Saw the Warning and the Sales Plan

If you saw a device company promote a procedure while keeping its safety warnings out of the pitch, tell our whistleblower experts what happened. We build the case with you around the company’s decisions and the government claims they caused, and bring in medical device fraud whistleblower lawyers who understand unapproved-use cases. We stay beside you from the first account of the conduct through the pursuit of a recovery.