The securities lawsuit alleges that Medtronic artificially inflated its stock price through an 'off-label' promotional scheme involving a morphogenetic protein used in its Infuse bone graft device.
Medtronic's Infuse Bone Graft is controversial due to the compound's association with life-threatening complications including swelling of the airways, which can cause difficulty breathing, speaking and swallowing. On July 1, 2008, the FDA issued a warning concerning off-label use of the Medtronic Infuse Bone Graft. Specifically, the FDA warned that there were risks associated with the use of the bone graft on the cervical spine.
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The suit alleges that "Medtronic and its stable of highly paid doctor-consultants recklessly downplayed the safety risks of Infuse – especially in off-label procedures – and that Medtronic’s improper off-label marketing and revenue growth were directly tied to a troubling and financially dangerous rise in safety concerns linked to Infuse, including 'potentially serious, and even deadly, adverse events, particularly in the cervical spine."
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