Medtronic has agreed to settle some lawsuits related to its InFuse biologics product for $22 million though the final price tag for legal costs and setllement is much higher.
Without admitting liability, Medtronic announced Tuesday that it has agreed to settle certain filed and unfiled lawsuits related to its controversial InFuse bone graft for $22 million if some conditions are met.
That would satisfy the claims of an estimated 950 claimants, the Minnesota company said. Stressing the fact that no court has found Medtronic to be liable for making what lawsuits allege is an unsafe product, the company noted that there are 750 cases that are still pending and the potential for more claims coming from 2,600 individuals based on conversations with attorney’s firms.
For that, Medtronic is taking a $120 million to $140 million charge in its fourth quarter. Medtronic has already paid $85 million in 2012 to settle a class action securities lawsuit related to InFuse where the lead plaintiff was the Minneapolis Firefighters’ Relief Association.
InFuse was also target of a Department of Justice investigation which scrutinized Medtronic for promoting the product for off-label use, which is illegal, but the investigation closed without the DOJ leveling any charges.
The FDA approved InFuse for lumbar spine fusion in July 2002, and in a public health notification in 2008 warned that the procedure showed major complications when used off-label, specifically in the cervical spine. Complications resulted swelling of the neck and throat tissue, per that FDA letter to physicians, but other complications have also surfaced, including male infertility and the risk of cancer.
In 2011, an entire edition of the Journal of Spine was used to discredit the clinical research behind the InFuse product with allegations that physicians with financial ties to Medtronic undermined the risks of the product and overemphasized the benefits.
In response, Medtronic’s CEO Omar Ishrak took the unprecedented step of providing a $2.5 million grant for independent researchers at Yale to study clinical data tied to the product's FDA approval. The Yale review, details of which were revealed in June last year, neither vindicated nor vilified Medtronic. The evaluation found that the biologics product is as good as but not better than traditional iliac crest bone graft (ICBG) procedures. Further, cancer rates were higher among patients who underwent Medtronic's Infuse procedure.
But the review did not conclude that the product is unsafe. As a result, InFuse, once a blockbuster product for Medtronic responsible for hundreds of millions in revenue, continues to be on the market.
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