Medtronic to Settle 950 Infuse Claims for $22 Million

Medtronic has agreed to settle, for a total of about $22 million and without admitting any liability, the claims of about 950 plaintiffs in the continuing series of lawsuits over their Infuse bone graft product.

We reported in early March that the number of cases had reached 700 with a total number of plaintiffs of about 1200. Since that time, the numbers have grown. Even assuming the successful resolution of the just-announced settlements, Medtronic says that about 750 filed cases representing about 1200 plaintiffs still remain pending in various jurisdictions around the United States. The majority of these cases are still in the early procedural stages and none have resulted in a finding of liability against Medtronic. The company further estimates that as many as 2000 cases may yet be filed.

In a press release addressing the settlement, Medtronic said, "This agreement is a compromise of disputed claims and is not in any way an admission of liability or validity of any defense in the litigation by Medtronic." The company continues to stand behind Infuse Bone Graft, which it says has been employed in more than one million procedures since it was first approved in 2002.

Medtronic says it will vigorously defend the product and company actions in the remaining cases. Earlier this month, the press release reports, on the eve of trial and after several days of pretrial motions, a California trial judge entered summary judgment in favor of Medtronic in the first Infuse Bone Graft case scheduled to go to trial.  

The company anticipates it will take a special charge in the range of $120-$140 million in its recently completed fourth quarter under the guidelines of Financial Accounting Standards (FAS) 5. This charge accounts for the $22 million settlement just announced, the estimated settlement of the approximately 3800 additional pending and as-yet unfiled claims, and certain costs associated with these settlements.

Infuse is Medtronic's tradename for its recombinant bone morphogenic protein-2 (rhBMP-2) product, a genetically engineered version of a naturally occurring protein that stimulates bone growth. This bone morphogenetic protein promotes bone growth and gives surgeons some control over where that growth occurs.  FDA gave limited approval for its use in 2002 as an alternative to conventional spinal fusion to treat degenerative disc disease and open fractures on the tibia, and for some oral and dental procedures.

Stephen Levy is a contributor to Qmed and MPMN.