Inspire Class Action Lawsuit Alleges Problems With Sleep Apnea Implant Concealed

Low demand, high inventory and a failure to properly train enough surgeons were just some of the reasons investors say Inspire dropped its projected 2025 earnings by 80%.

A newly filed class action accuses the makers of the Inspire IV Implantable Pulse Generator (IPG) of misleading investors about sales and operations, leading to a $1.5 billion drop in shareholder value.

On November 4, Inspire Medical Inc. and its chief officers were named as defendants in the complaint (PDF), which was brought by the City of Pontiac Reestablished General Employees’ Retirement System (PGERS), seeking class action status over the rollout of the Inspire V IPG, which the plaintiffs say led to a drop in stock value that hurt investors.

The Inspire V Implantable Pulse Generator is a key component of the Inspire Upper Airway Stimulation (UAS) system, which helps treat obstructive sleep apnea by sending mild electrical pulses to stimulate the tongue muscles and keep the airway open during sleep. The IPG contains the programmed settings prescribed by a physician, controlling the timing and intensity of each stimulation cycle.

The announcement of the Inspire V IPG in August 2024 came shortly after serious problems with its predecessor. A month prior, Inspire Medical Inc. sent an urgent medical device correction notice to its customers, announcing an Inspire IV IPG recall due to a manufacturing defect that could result in electricity leaking into patients’ bodies.

The U.S. Food and Drug Administration (FDA) gave the recall a Class I designation, meaning that patients could be seriously injured or die due to the problems with the implant.

The investors accuse Inspire of failing to properly roll out the new implant, indicating that the company misled shareholders into believing there was a huge demand for the sleep apnea implants. A year later, on August 4, 2025, plaintiffs say the company admitted that it had oversold the device.

Originally, the Inspire V IPG was supposed to be “soft launched” in late 2024, and then fully launched in the U.S. by February. However, in an August 2025 earnings call, Inspire officials told investors the device, its flagship product, was facing several problems with its introduction.

The lawsuit argues that, in that call, investors were told for the first time of the low demand for the device, the overstock of inventory, the fact that the company had failed to finish training surgeons at key medical facilities where the Inspire V would see the most use, and that even if they were trained, they would not have been able to seek Medicare reimbursements for the implant until July 2025.

Throughout the previous year, the company had claimed the rollout was going well, the lawsuit indicates.

Inspire dropped its 2025 earnings projections by more than 80%, and the company’s stock dropped 32% as a result, taking $1.5 billion in shareholder value with it, the lawsuit claims.

“This decline in Inspire’s stock price following the corrective disclosures is directly attributable to the market absorbing information that disclosed the falsities in or misleadingly omitted from Defendants’ material misrepresentations and omissions.”

– PGERS v. Inspire Medical Inc. et al

The lawsuit seeks class action status for all Inspire Medical Inc. investors who held stock in the company from August 6, 2024, through August 4, 2025. They accuse the manufacturer and its head officers of violations of the Exchange Act.

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