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Irish med-tech giant Medtronic is being sued over a controversial bone graft device

It is claimed that the firm covered up negative effects of a product used in back surgeries.

Image: AP/Press Association Images

MEDTRONIC, A US med-tech giant based in Ireland, faces being dragged through courts over claims it misled investors.

However, the company has told Fora that it will fight claims that it covered up negative effects of one of its devices, and said it fully stands behind its product.

Medtronic is one of the largest medical devices companies in the world and the most profitable company in Ireland, with profits of more than €3 billion in 2015.

While it has most of its operations in the US, the firm moved its headquarters to Ireland after it took over Irish-based Covidien in a controversial $50 billion inversion deal last year.

It is claimed that the company covered up negative side effects from its Infuse bone growth product for nearly a decade.

Medtronic’s Infuse is used in spine surgery where a surgeon fuses two of a patient’s vertebrae together to mitigate pain from degenerative disc disease. It is meant to help with the surgery, making the process more reliable and less painful.

Risks

The Star Tribune, a Minnesota-based paper, reports that company-sponsored studies did not disclose risks in the product that independent studies later reported.

News agency Reuters also reports that off label sales of Insuse comprised 85% of sales. Off label sales are where a product is not used for its approved purposes. Infuse has been used in more than one million surgeries worldwide.

Earns Medtronic Medtronic's corporate headquarters in the US Source: AP/Press Association Images

In October 2012, the US Senate Finance Committee found that Medtronic was “heavily involved” in shaping the content of some studies evaluating the risks of Infuse.

Medtronic disputed the findings, saying it “vigorously disagreed with any suggestion that the company improperly influenced or authored the peer-reviewed published manuscripts discussed in the report”.

Three of Medtronic’s shareholders, the West Virginia Pipe Trades Health and Welfare Fund, the Employees’ Retirement System of the State of Hawaii and Germany’s Union Asset Management Holding AG, are now suing the company.

Reuters reports that investors claim Medtronic’s activities inflated the company’s stock price, and caused them to lose hundreds of millions of dollars as the truth came out.

Back in court

Last year Minnesota’s chief federal judge, John Tunheim, threw out the case on procedural grounds. However, during the week a court of appeals in St. Louis overturned that decision and sent the case back to federal trial court in Minnesota.

In a statement to Fora, a Medtronic spokesman said: “We’re disappointed with the decision, but continue to believe the claims in this case are without merit.

ched The plaintiffs are still a long way from proving liability in this case, and we are prepared to defend ourselves in court.”

He added: “We won’t speculate on any impact this decision may have on our operations given that the plaintiffs are still a long way from proving liability.”

Asked if the company stands behind the quality of its Infuse product he said: “Yes. We continue to stand behind Infuse.”

Medtronic has been involved in several legal battles over Infuse, and in 2014 agreed to resolve the claims of an estimated 950 claimants for a total payment of approximately $22 million.

The company said at the time that the settlement agreement was “a compromise of disputed claims and was not in any way an admission of liability or validity of any defense in the litigation by Medtronic”.

Written by Paul O’Donoghue and posted on Fora.ie

Correction: An earlier version of this article incorrectly referred to Medtronic as a pharmaceutical company. It is a medical devices company.

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