Medtronic to pay $51m to settle Covidien, ev3 DoJ investigations

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Medtronic (NYSE:MDT) said yesterday that it agreed to pay $50.9 million to settle a number of U.S. Dept. of Justice probes into marketing activities from companies it acquired, Covidien and ev3.

Medtronic said that its subsidiary ev3, acquired when the Fridley, Minn.-based medtech giant picked up Covidien in 2015, agreed to plead guilty to a misdemeanor charge related to its marketing of the Onyx Liquid Embolic System, pay $17.9 million and adopt new compliance and reporting terms for three years.

The charges relate to ev3’s marketing of the device for “unproven and potentially dangerous uses,” federal prosecutors said in a DoJ release.

The Onyx Liquid Embolic System won FDA approval in 2005 for blocking blood flow to arteriovenous malformations of the brain. Prosecutors in the case claim that sales reps from ev3 marketed the device for unapproved uses between 2005 and 2009, even after FDA officials contacted ev3 over “specific safety concerns regarding uses of Onyx outside the brain,” according to the release.

In 2012, the FDA released a warning related to the Onyx system after receiving reports of more than 100 adverse events and nine patient deaths related to use of the device.

“Ev3 disregarded laws designed to protect patient safety. The U.S. Attorney’s Office is committed to protecting patients and the integrity of federal health care programs, and we will continue to use our criminal authority to ensure that medical device manufacturers play by the rules that protect the public and ensure quality of care,” United States Attorney Andrew Lelling wrote in the DoJ release.

The $17.9 million payment includes a criminal fine of $11.9 million and the forfeiture of $6 million, according to the DoJ.

Medtronic said that it was also settling two other DoJ investigations related to Covidien and ev3’s activities prior to their acquisition in 2015.

The medtech giant said it agreed to make a payment of $13 million to resolve an investigation into the Systematic Evaluation of Patients Treated With Stroke Devices for Acute Ischemic Stroke registry. The company called the settlement “a compromise of disputed claims” and said it made “no admission that the Stratis Registry was improper or unlawful.”

In a second settlement, related to “various market-development and physician engagement activities” conducted by Covidien and ev3’s peripheral vascular and endovenous businesses prior to their acquisition, Medtronic said it agreed to pay $20 million, but admitted no fault.

“Medtronic is committed to maintaining the highest standards of ethical conduct and compliance with all applicable regulatory guidelines. The plea agreement and settlements that the Medtronic entities agreed to all concern matters that took place either largely or entirely prior to Medtronic acquiring the businesses in which the activities took place. Medtronic has made significant investments in ensuring that it fulfills its obligations to all of its stakeholders and to do business the right way,” the company wrote in a press release.

Last week, a state court jury in Indiana reportedly awarded a $112 million decision to a local spine surgeon turned medical device inventor in his five-year royalties dispute with Medtronic.

The post Medtronic to pay $51m to settle Covidien, ev3 DoJ investigations appeared first on MassDevice.

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