Minnesota medical device company agrees to $43M settlement
MINNEAPOLIS (AP) — A medical device company in Minnesota will pay investors $43 million in a proposed class-action legal settlement that would resolve one of the last remaining lawsuits involving its bone-growth product.
The institutional investors who sued Medtronic alleged the company secretly paid spine surgeons to conceal the adverse side effects of its Infuse product, the Star Tribune reported. The lawsuit also accused the company of asking surgeons to overstate the disadvantages of alternative treatments.
Infuse contains a synthesized human protein that causes bone to grow, avoiding the need for other bone-graft materials for spine-fusion surgery. But it can also produce unwanted bone growth and swelling.
Medtronic denies all allegations of liability and wrongdoing related to the case, including that shareholders were harmed by the collapse of a stock price that had been artificially inflated by misrepresentations and omissions related to Infuse’s safety.
“This announced agreement is merely a compromise of vigorously disputed claims that avoids the costs and disruptions of continued litigation,” Medtronic spokesman Eric Epperson said. “Resolving this litigation will allow the company to continue to dedicate funding for productive activities on advancing therapies and patient care.
The full settlement will be paid by the company on behalf of the defendants if the agreement is approved by a judge.
Medtronic settled a federal racketeering lawsuit last year brought by insurer Humana that accused the medical device company of sponsoring and distributing research that falsely represented the bone-growth product as safe for use in certain surgeries and helping hospitals and doctors get paid for using Infuse.
The company is also in the process of settling roughly 6,000 claims from patients who allege they were injured by Infuse.
Information from: Star Tribune, http://www.startribune.com