Forty Medtronic employees will be losing their jobs, the company has disclosed. According to Minnepolis/St. Paul Business Journal, Medtronic has not given many details about the job cuts. Some jobs being eliminated are in Fridley, where the headquarters for its corporate functions and neuromodulation business is located. Employees are also being laid off in Mounds View, the location of Medtronic’s cardiac rhythm disease management and structural heart division. It is unclear whether the employees have already been laid off or if the job cuts are pending. The company disclosed the job cuts to the Minnesota Department of Employment and Economic Development (DEED) in April and the agency recently made this information known in an update to its Dislocated Worker Program report.
Medtronic recently agreed to pay $2.8 million to settle whistleblower claims alleging that the firm improperly solicited Medicaid recipients. According to Legal Newsline, the settlement involved 36 states and the federal government. The payment will resolve a 2011 lawsuit filed under the False Claims Act in the U.S. District Court for the Northern District of Texas. Former employees alleged that the company submitted false claims to Medicaid programs by improperly soliciting Medicaid recipients to replace their insulin infusion pumps. Whistleblowers are protected by law when they have knowledge of wrongdoing and file a lawsuit on behalf of the government. If the case is successful, the whistleblowers are entitled to a portion of the money recovered.
In the past few years, Medtronic has also been under scrutiny over its bone growth product Infuse. The product has only been on the market since 2002, but is already the subject of controversy due to allegations that the company paid doctors to hide side effects associated with Infuse.
In June 2011, the Spine Journal dedicated an entire issue to side effects associated with Infuse. The group of spine experts found that Infuse was associated with side effects such as male sterility, infections and an increased risk of cancer. The findings helped prompt several government investigations. A follow-up Senate report found that Medtronic employees had helped write and edit studies promoting the use of Infuse.
Medtronic may also be facing more lawsuits over medical devices due to a Supreme Court decision denying the company preemption. The company uses preemption as a legal strategy in many cases, but an appeals court ruled that the claims were not preempted. The High Court denied Medtronic’s request to review this decision, allowing the suit to move forward.