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Medtronic, Investors Agree to Settle Infuse Class Action Lawsuit for $85 Million

Apr 2, 2012 | Parker Waichman LLP
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Without admitting any wrongdoing, Medtronic Inc. has agreed to settle a shareholder lawsuit alleging the company made false and misleading statements about its Infuse Bone Graft product.  According to a report from Bloomberg News, Medtronic will pay $85 million to settle the Infuse Class Action lawsuit, which was filed in 2008 in Minneapolis federal court by institutional investors, including the Minneapolis Firefighters Relief Association, the Oklahoma Teachers' Retirement System, the Oklahoma Firefighters Pension Fund and the Westmoreland County Employee Retirement System.

The suit alleged that, between November 2006 and November 2008, the company misled investors about the profitability of Infuse. The complaint further alleged that the company had deliberately promoted the Infuse system for off-label uses and failed to disclose that its sales were largely dependent on unapproved uses. According to the complaint, Medtronic stock plunged 13 percent after it was forced to reveal that the Justice Department was investigating the alleged off-label promotion of Infuse.

The settlement, which is still subject to court approval, doesn't end the legal troubles Medtronic faces over Infuse. The company was just named in a separate shareholder lawsuit earlier this month that made similar claims about Infuse.   The company has also been named in Infuse personal injury lawsuits by people who allegedly suffered debilitating injuries when Infuse was used off-label.

Over the summer, The Spine Journal raised serious questions about the validity of the research that was used to gain regulatory approval of Infuse. Medtronic Infuse injuries can include ectopic or uncontrolled bone growth at or near the site of the surgery; ongoing or chronic radiating pain in the legs or arms; male sterility, retrograde ejaculation, or other uro-genital injuries; nerve injuries causing severe and chronic pain; and even cancer. In cervical spine surgeries some Infuse patients have experienced acute severe neck swelling several days after surgery resulting in death or permanent injury.

In November, a prominent researcher warned that Infuse may be associated with a higher risk of developing cancer. In December, Medtronic settled a U.S. Department of Justice lawsuit over Infuse marketing for $23.5 million without admitting wrongdoing,

As we've reported previously, it's thought that roughly 85% of the producers that have involved Infuse are off-label uses.   In July 2008, the U.S. Food & Drug Administration (FDA) warned that Infuse and similar bone growth products had caused serious, sometimes life threatening complications, when used in off-label in spinal procedures.  The FDA approved Infuse, which is made with a genetically engineered material called rhBMP-2 (recombinant human Bone Morphogenetic Protein-2), 2002 for use in one type of spine surgery called anterior approach lumbar fusion, and two types of dental surgeries.

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