Medtronic Inc. agreed to pay $85 million to settle a federal class action lawsuit initiated by a group of shareholders claiming the medical device manufacturer made misleading and false claims about its InFuse bone repair protein.
The Minneapolis Firefighters Relief Association filed the shareholder lawsuit in December 2008 alleging Medtronic did not inform them how much of the company’s profits came from the “off-label” uses of InFuse that have not been approved by health regulators. They also claimed that the company did not disclose its alleged illegal marketing practices of the device and the side effects that some patients who used the product for off-label purposes suffered from.
The lawsuit also claimed that Medtronic’s actions caused the company’s stock price to inflate, but when its actions were revealed, the stock plummeted, causing the shareholders to lose money.
Medtronic claims that it did nothing wrong and did not make any misrepresentation, according to the Associated Press.
InFuse is approved for oral, spinal and dental graft procedures, but is mostly used in neck surgeries and other operations. Doctors are allowed to use medical devices and drugs off-label as they deem appropriate, but companies are not allowed to market their products for off-label uses.
In 2008, the Food and Drug Administration issued a warning regarding the off-label use of InFuse in neck surgeries, citing reports of life-threatening injuries.