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Orthopedic Development Corp. mired in lawsuit.

Clearwater, CA-based Orthopedic Development Corp. (ODC) is in hot water with some of its investors due to claims of fraud in some of the company's marketing materials.

The issue centers around ODC's TruFUSE product, a $2,500 kit that includes a drill bit and freeze-dried towels made from the thighbone of a donated cadaver. In marketing materials distributed by the company, ODC claims that TruFUSE is a less expensive, easier and more effective tool for treating lower-back pain than the rods and screws usually used in spinal fusion surgery. The company also claims that when TruFUSE is used, outpatient surgery can be completed in less than 30 minutes with a local anesthetic and small incision. Furthermore, ODC claims that hospitals can save as much as $9, 000 per surgery while charging Medicare or private insurers the same amount they would for a rod-and-screw procedure, the company claimed.

One of the company's largest investors, Terje Gronlie, who offered the private company a $900,000 investment, has since filed suit against the company, alleging that ODC defrauded him by using exaggerated claims about the product. Investors this year alone financed $8 million for this product.

Dan Grayson, a former vice president of sales who filed suit after being fired from ODC, also was quoted by the St. Petersburg Times newspaper as having said, "They [ODC] don't have any clinical evidence that TruFUSE works."

The ODC has responded with its own suit, which accuses Gronlie and Grayson of devising an anonymous e-mail campaign that allegedly defamed the company and certain principals for unspecified economic gain. According to comments from ODC President and CEO James Doulgeris, who spoke with the Times, the company had designed a clinical study and signed contracts with physicians, but Gronlie and another former employee assigned to get the trial started never did so. "It's not like we just made this up," Doulgeris told the newspaper. "This is all supervised by board-certified spinal surgeons."

In the United States, one million spinal fusions are performed every year.

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Title Annotation:NEWS FRONT
Publication:Orthopedic Design & Technology
Geographic Code:1USA
Date:Jul 1, 2007
Previous Article:Corin's hip resurfacing system approved by FDA.
Next Article:Multi-million dollar fraud settlement signals heightened enforcement.

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