Medtronic asks judge to accept its negotiated $17.9m sentence in ev3 case

Medtronic (NYSE:MDT) wants the judge in its off-label marketing case against its neurovascular subsidiary ev3 to accept the sentence that the company and U.S. Justice Department have agreed upon.

Medtronic agreed in December 2018 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. Fridley, Minn.-based medtech giant Medtronic acquired ev3 when it picked up Covidien in 2015.

The Onyx system won FDA approval in 2005 for blocking blood flow to arteriovenous malformations of the brain. Prosecutors claim that ev3 sales reps 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 DOJ.

In 2012, the FDA released a warning regarding the Onyx system after receiving reports of more than 100 adverse events and nine patient deaths related to use of the device. The ultimate charges relate to ev3’s marketing of the device for “unproven and potentially dangerous uses,” federal prosecutors have said. The sales reps’ behavior occurred months before Covidien bought ev3 in July 2010, according to the plea agreement.

Ev3 argues in its sentencing memorandum that it not be placed on probation because Medtronic acquired ev3 several years after the criminal conduct and took “significant steps” to prevent any future off-label marketing of the Onyx system.

The company also reminded the court that the off-label use its sales reps were promoting in the U.S. “involved an unapproved use for Onyx that has been approved for years in 74 countries around the world.”

The judge is not obliged to accept the sentence negotiated by prosecutors and the defendants.

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