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Medtronic Pays $85 Million to Settle Infuse Lawsuit

Medtronic Inc. has agreed to pay $85 million to settle a shareholder lawsuit originally brought against the company by the Minneapolis Firefighters' Relief Association in December 2008. The lawsuit, which was consolidated into a class action in 2009, claimed that the Minneapolis, Minn.-based company was deliberately misleading about its product Infuse, a genetically engineered bone graft used in spinal, oral and dental graft procedures.

Medtronic was accused of withholding that as much as 85 percent of Infuse sales depended on “off-label” uses, which means that sales representatives were allegedly promoting the product for uses not approved by the U.S Food and Drug Administration. Some of the doctors who would use Infuse, according to the lawsuit, were paid by Medtronic. According to shareholders, when Medtronic revealed that the U.S. Department of Justice and the U.S. Senate were looking closely at possible off-label marketing, share prices and Infuse sales dropped.

Court papers show that some of the lead plaintiffs in this case are the Teachers' Retirement System of Oklahoma, the Oklahoma Firefighters Pension Fund, Germany's Union Asset Management Holding AG, and Denmark-based Danske Invest Management AS.

Under the settlement, Medtronic explicitly denies withholding any information and also denies any wrongdoing. In the interest of transparency, Medtronic hired Yale University in August 2011 to run an independent review of Infuse and its sales practices. The study is, however, funded by Medtronic. Results are expected within 18 months of the start date of the study.

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