Fresenius to settle dialysate lawsuits for $250m

Fresenius Medical Care (NYSE:FMS) said yesterday that its North American subsidiary agreed in principle to a $250 settlement of the multi-district litigation brought over its GranuFlo and NaturaLyte dialysis drugs.

The deal, brokered with a committee of plaintiffs’ representatives, requires that 97% of all patients who brought lawsuits sign on by July. If that bar is met, Fresenius Medical Care North America pledged to fund the settlement in August, using $220 million from its insurers.

The GranuFlo and Naturalyte products were used to lower the acidity of patients’ blood during dialysis treatments. The lawsuits in the MDL generally allege that the dialysates’ high concentration of acetone led to abnormally high levels of bicarbonate in the blood, leading to fatal heart problems and strokes.

In 1 case, a dialysis patient in Kentucky named Linda Teague allegedly died at age 48 from cardiac arrest after a procedure there.

“Decedent received defendants’ defective product during that dialysis treatment and, on or about Jan. 14, 2011, suffered cardiac arrest and died from the injuries she sustained as a result of her exposure to defendants’ defective product,” according to the complaint. “Even though defendants knew of the risks for several years, medical providers were unaware that the high levels of bicarbonate in defendants’ products heighten the risk of cardiac injury by 6 times. As a result, thousands of patients receiving dialysis treatment were unknowingly overdosed.”

An internal Fresenius memo from November 2011 allegedly details the results of a study completed in 2010, “based on data defendants had available for many years,” according to the documents.

The FDA launched a Class I recall of FMC’s GranuFlo product in March 2012, after obtaining a copy of the memo, and and began investigating Fresenius later that year, after more than 900 patients experienced heart attacks at Fresenius dialysis centers.

Fresenius said it expects the settlement to deliver a pre-tax charge of $60 million, but stood pat on its guidance for 2015. The German dialysis giant said it expects to post sales of roughly $16.7 billion for 2015.

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