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Medtronic to Settle Lawsuits Over Devices Tied to Deaths
2010-10-15
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Medtronic, the maker of heart devices, agreed to pay $268 million to settle lawsuits over claims that fractured wires in a line of its cardiac defibrillators caused at least 13 deaths.
Medtronic said it was resolving claims that wires connecting its implantable Sprint Fidelis defibrillators to patients’ hearts were defective. The company halted sales of the so-called defibrillator leads in October 2007 after they were linked to users’ deaths.
“Both the plaintiffs and Medtronic realized this was the best resolution for people injured by these wires,” Hunter J. Shkolnik, a lawyer for injured defibrillator users, said on Thursday in an interview.
Medtronic lowered its profit forecast in August, citing slower defibrillator sales. It expects fiscal 2011 earnings of $3.40 to $3.48 a share, down from an earlier forecast of $3.45 to $3.55, company officials said that month.
“Medtronic is pleased we were able to negotiate terms that were mutually agreeable to the parties,” Christopher Garland, a company spokesman, said in an interview.
The settlement of the case, In Re Medtronic Inc. Sprint Fidelis Leads Products Liability Litigation, covers about 8,100 cases, or “virtually all” claims in the United States, Mr. Garland said.
The settlement resolves cases in both federal and state courts. It will provide an average payout of more than $33,000 each to patients who have defibrillators with wires that have broken or are considered likely to break. The amount will depend on the extent of the injuries and defects.
Medtronic had more than 50 percent of the $5.8 billion global market for defibrillators before sales of the leads were halted.
The wires deliver electrical jolts from the stopwatch-size defibrillators to regulate faltering heartbeats. About 268,000 patients had those leads at one time, company officials said. They were introduced in 2004, the officials said. The company estimates that 170,000 people worldwide still have defibrillators with the Sprint Fidelis leads inside them.
Medtronic acknowledged in March 2009 that the flawed wires “may have been a possible or likely contributing factor” in 13 deaths.
The settlement over the Sprint Fidelis defibrillators is the second such accord over a line of the Medtronic’s heart devices. The company agreed in 2007 to pay more than $114 million to settle lawsuits over its Marquis line of defibrillators.