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Medtronic Says Bone Graft Investigation Is Over

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MINNEAPOLIS (AP) — Medical device maker Medtronic Inc. said Wednesday that federal prosecutors have closed their investigation of the company’s InFuse bone graft.

The world’s largest medical device company was being investigated by the U.S. Department of Justice and the U.S. Attorney for the District of Massachusetts. The government first subpoenaed documents from Minneapolis-based Medtronic in October 2008.

InFuse contains a genetically engineered protein that can stimulate bone growth. In June, a medical journal alleged that Medtronic downplayed the risks of InFuse and did not disclose millions of dollars in payments to the authors who wrote the initial studies of the product. InFuse brought in most of the revenue from Medtronic’s spinal business, the company’s second-largest division, but the reports have hurt sales.

InFuse is approved for use in spinal, oral and dental graft procedures, but most of the time it was used in neck surgeries and other procedures. Physicians are allowed to use drugs and medical products off-label as they see fit, but companies cannot market their products for off-label uses. Use of InFuse in neck surgeries can lead to problems swallowing, breathing and speaking. Some patients had to have other surgeries because of those problems.

“After several years of investigation, we are pleased that the Department of Justice and the U.S. Attorney’s Office have come to the decision to close their investigation of the company related to InFuse Bone Graft,” said Chris O’Connell, executive vice president and group president of Restorative Therapies Group, which includes Medtronic’s spinal business.

A Justice Department spokeswoman declined comment.

On March 30 Medtronic agreed to pay $85 million to resolve a federal class-action lawsuit brought by a shareholder, the Minneapolis Firefighters Relief Association. The association manages pension funds for Minneapolis firefighters and their families, and it alleged Medtronic did not disclose how much of the company’s revenue from InFuse came from “off-label” uses, or uses that have not been approved by regulators, did not disclose the side effects that some of those patients were suffering, and did not disclose what the plaintiffs described as illegal marketing.

Medtronic said it did not make any misrepresentation and did nothing wrong.

Shares of Medtronic rose 7 cents to $38.22 Wednesday and were unchanged aftermarket.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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