Medtronic Lawsuit Settled for $85 Million

New York, NYA Medtronic lawsuit brought by disgruntled shareholders has been settled with the decision by the defendant to pay $85 million. The Associated Press reports the manufacturer of medical devices agreed to the settlement in an effort to put behind them allegations surrounding the Medtronic infuse bone graft and Infuse bone repair protein.

Medtronic—the world's largest manufacturer of medical devices, found itself facing a class-action lawsuit brought by the Minneapolis Firefighters Relief Association. The latter is a shareholder with various investments in the firm, and accused Medtronic of making false and misleading statements about Medtronic bone graft and—specifically—failure to disclose the percentage of Medtronic's revenue derived from Medtronic off-label use of Medtronic bone products.

The lawsuit, originally brought in December 2008, also accused Medtronic of failure to disclose the side effects and Medtronic complications borne by some of those bone graft and Infuse patients.

While agencies such as the US Food and Drug Administration (FDA) approve devices for specific uses and severely restrict their use as such, doctors have the legal, moral and medical authority to supersede those restrictions as they see fit. But that's where it ends—and it remains illegal for any device manufacturer to promote, or market a product for a use or indication other than that for which it carries FDA approval.

Medtronic was accused by the plaintiffs of illegal marketing—promoting Medtronic bone graft for indications for which it was not approved, together with the non-disclosure of data. The combination, it was alleged, artificially inflated Medtronic's stock price. When the company's practices were revealed, the stock price fell, according to the AP report (3/30/12).

The drop in stock prices translated to a loss for the plaintiffs.

2008 was a watershed year for this particular Medtronic lawsuit. Not only was the action filed, but also a separate lawsuit was launched against Medtronic by the family of a woman who died from Medtronic complications after Medtronic infuse bone graft was used on her neck. The use of Infuse during neck surgery carries some risk, given the potential for problems swallowing, breathing and speaking. The victim's family claimed that a Medtronic representative encouraged the surgeon to use Infuse for the procedure shortly before the surgery.

That same year, the US Department of Justice issued a subpoena against Medtronic with regard to alleged Medtronic off-label uses of Infuse. Last year, a medical journal revealed that Medtronic downplayed side effects of Infuse, including Medtronic complications that can cause infertility in men.

The original Medtronic lawsuit brought by the Minneapolis Firefighters Relief Association in 2008 was consolidated to class-action status a year later. In agreeing to the $85 million settlement, Medtronic admits to no wrongdoing.