Medtronic Inc. faces several product liability lawsuits alleging defective and illegally marketed medical devices.
Medtronic Inc. recently agreed to an $85 million settlement with shareholders based on claims that the medical device company's executives lied about the profitability of Medtronic's INFUSE bone graft product. Although Medtronic settled the securities fraud lawsuit, company officials still deny responsibility for the off-label marketing that led to the lawsuit.
"Under the settlement, Medtronic explicitly denies that it made any misrepresentations or omissions or that it otherwise engaged in any wrongdoing," a spokesperson said in an e-mail to the press.
The company still faces several INFUSE bone graft lawsuits throughout San Francisco filed by patients who received the medical devices for off-label uses. The Food and Drug Administration (FDA) approved Medtronic's INFUSE bone graft only for a lower spine operation called an anterior lumbar interbody fusion. There is evidence that the majority of INFUSE sales were for operations other than anterior lumbar interbody fusion and that many patients were injured by this off-label use.
The Medtronic securities fraud lawsuit alleged that the off-label marketing and resulting personal injury lawsuits hurt the company's stock price and caused a U.S. Justice Department probe into the company's marketing conduct. Investors also alleged that the company fraudulently presented sales growth projections based on "misconduct that invited, and ultimately brought about, the scrutiny of federal regulators and an abrupt decline in sales," Bloomberg News reports.
"The settlement is a good one because the amount is significant and it was the right way to go in this case," one investor's attorney said. The company plans to document the $85 million shareholder settlement as a one-time expense for its fourth fiscal quarter.
Medtronic has faced many other legal actions arising out of the marketing or malfunctioning of its medical devices. Another recent lawsuit was brought by a patient who received the company's SynchroMed EL pain pump, a device that uses an intrathecal catheter to deliver medication to the spine.
The patient had the device implanted and its tip was either improperly installed or became infected because signs of spinal inflammation started to appear near the tip of the catheter. The device was removed, but the inflammation was so severe that it rendered the man permanently paraplegic, according to his lawsuit.
Medtronic was able to get that patient's case thrown out of court, however, because the man filed in state court and the U.S. Supreme Court's "pre-emption doctrine" requires all lawsuits to be filed in federal court if they involve a defective medical device that went through the most thorough FDA approval and review process.