Medtronic Shareholders Drop Infuse Lawsuit

Medtronic plc has rid itself of another Infuse lawsuit.

Three shareholder lawsuits filed against former and current directors and officers of Medtronic, Inc. (now Medtronic plc) in Minnesota state court over alleged off-label Infuse promotion, have been dropped by the plaintiffs, with prejudice.

A case dismissed with prejudice is over and done with, once and for all, and can’t be brought back to court.

Off-Label Promotion Allegations

The derivative suits were all filed between 2012 and 2014. The suits alleged that, with the knowledge and complicity of officers and directors, the company “designed and executed a scheme to evade the Federal Drug Administration’s prohibition against off-label promotion of medical devices in order to increase sales of INFUSE.” The suits further alleged that those officers and directors breached their fiduciary duties by causing the company to “conspire with physicians to underreport adverse events in studies involving INFUSE.”

According to a Medtronic 8-K SEC filing on June 9, 2015, the plaintiffs in three actions (Himmel v. Ellis, Road Carriers v. Anderson and Cutler v. Ishrak) voluntarily dismissed their claims. The state court signed three Orders, “effecting full and final dismissal in each case, ” on May 27 and June 4, 2015.

Allegations “Without Merit”

When the lawsuits were filed, the company set up a Special Litigation Committee (SLC) made up of a retired Minnesota state court judge and a corporate law professor at the University of Minnesota Law School to investigate the claims made in the derivative lawsuits. The committee was given complete authority to analyze the company’s legal rights and remedies, and determine whether any rights and remedies should be pursued.

In May 2014, the SLC issued a report which concluded that the claims against the directors and officers of the company “were without merit.” The SLC then filed motions to dismiss the suits. Prior to the final hearing of those motions to dismiss and after discovery of internal company documents, the plaintiffs decided to raise the white flag.

Infuse Saga Continues

The company is still involved in numerous lawsuits filed by payers and patients over alleged off-label Infuse promotion. Those cases are bogged down in various federal courts over legal issues involving federal preemption and other procedural issues. After allegations by The Spine Journal and Senator Chuck Grassley that improper payments to surgeons tainted clinical studies were largely discredited by the Yale YODA study, Infuse sales have bounced back.