Medtronic settles states' probe into Infuse marketing for $12 million

BOSTON (Reuters) - Medtronic Plc has agreed to pay $12 million to resolve claims that the company engaged in a deceptive marketing strategy to promote its Infuse bone graft product used in spinal surgery, the Massachusetts attorney general said on Wednesday.

Massachusetts Attorney General Maura Healey said the settlement will resolve an investigation by her office and those in four other states related to Medtronic’s promotion of Infuse, which is used to stimulate bone growth.

In court papers, Healey alleged that Medtronic sought to expand the device’s market by using deceptive company-sponsored scientific literature to make false and misleading claims about its safety and superiority.

According to the lawsuit, Medtronic collaborated with doctors who were paid millions of dollars in consulting fees to publish studies that the company then disseminated downplaying side-effects and omitting discussion of adverse results.

“Companies cannot use deceptive practices to increase their profits, while compromising the safety and well-being of patients,” Healey said in a statement.

Medtronic in a statement said nothing in the deal could be taken as a concession that it violated the law. It did not admit wrongdoing, according to court papers.

Infuse, which includes a manufactured version of a human bone-growth protein, was developed by as an alternative to bone grafts. The U.S. Food and Drug Administration approved it for use in some lower back spinal surgeries in 2002.

But off-label uses of Infuse eventually comprised 85 percent of sales. The FDA in 2008 warned against such uses, following reports of life-threatening complications.

In October 2012, the U.S. Senate Finance Committee found that Medtronic was “heavily involved” in shaping the content of published studies on Infuse and paid doctors who authored them $210 million.

Under Wednesday’s settlement, two Medtronic units will pay $12 million to resolve an investigation by attorneys general in Massachusetts, Oregon, California, Illinois and Washington.

The accord also imposes requirements on how Medtronic promoted clinical trial information and disseminated medical journal articles related to Infuse. The company must also make Infuse trial data public on a government website.

Medtronic has also faced more than 6,000 lawsuits nationally by people who claimed they suffered injuries after it promoted Infuse for off-label uses.

In a filing with the U.S. Securities and Exchange Commission on Dec. 4, Medtronic said it had reached agreements to settle “substantially all of these claims” as of July this year. It did not provide additional information.

Reporting by Nate Raymond in Boston; Editing by David Gregorio; additional reporting by Tina Bellon in New York; Editing by Chizu Nomiyama, Diane Craft and David Gregorio