A $43 million settlement was reached last week by Medtronic, resolving a class action lawsuit filed by investors over claims that the company manipulated studies involving its controversial Infuse bone graft product, artificially inflating stock values.
The complaint indicated that Medtronic defrauded investors by providing false information about the safety and effectiveness of its Infuse bone growth product.
On July 18, parties involved in the litigation issued a stipulation of settlement (PDF) detailing the proposed agreement, which provides compensation for about 21% of the value investors claim they lost.
Medtronic Infuse is a bioengineered bone morphogenetic protein (BMP), which is used to encourage bone growth and replace spinal disks by filling the gaps between vertebrae. It was approved by the FDA in 2002 for use in lumbar fusion surgery, but it has been widely used off-label, paricularly for cervical fusions, which have been found to carry a risk of serious and potentially life-threatening complications.
In recent years, hundreds of Medtronic Infuse lawsuits have been filed against the manufacturer, involving injuries suffered by individuals who had the artificial bone material implanted in their body. Those claims alleging that Medtronic failed to provide adequate warnings about the risk of complications and illegally promoted the device for uses that it never established were safe or effective.
The company also faced a number of investor lawsuits, which say that Medtronic, through a variety of methods, hid problems with Infuse bone growth product or lied about its safety or effectiveness in order to provide investors with an artificial and inflated view of the company’s value.
In 2012, Medtronic settled a lawsuit with the Minneapolis Firefighter’s Relief Association for $85 million over similar claims filed by the group.
Medtronic Infusion Problems
In 2008, the FDA issued an alert advising doctors not to use the Medtronic Infuse in upper spinal fusion procedures, after receiving dozens of reports involving potentially fatal complications that included swelling of the neck and breathing difficulties.
A number of patients have had to receive respiratory support tracheotomies, insertion of feeding tubes, anti-inflammatory medications and additional surgery after experiencing problems with Medtronic Infuse when used off-label during a cervical spine surgery.
The U.S. Department of Justice initiated an investigation into the actions of Medtronic that same year, investigating whether the manufacturer illegally promoted and marketed the Infuse bone graft for use in the cervical spine. While doctors are allowed to use FDA approved medical devices for non-approved purposes, the manufacturer is not allowed to promote or encourage such uses that they have not established as safe and effective.