Fresenius Announces $250 Million Granuflo Settlement

Fresenius Medical Care North America agreed to a $250 million settlement to resolve lawsuits that claim the company was aware of risks of their dialysis products yet failed to warn the public. The litigation centers upon Granuflo and Naturalyte, two dialysates that have been blamed for heart problems, strokes and death in thousands of patients.

Under the terms of the proposal, at least 97 percent of all plaintiffs with pending cases would have to agree to the settlement by July of this year, with funds dispersed in August of 2016. Even if the Granuflo settlement is finalized, it is not considered an admission of liability or an indication that the products are defective. In a press release issued February 17, Fresenius says it stands behind the safety and efficacy of Naturalyte and Granuflo, which “… continues to be the market leader for dialysis acid concentrates in the United States.”

$250 million Fresenius dialysis settlement proposed

According to the press release, Fresenius insurers will pay $220 million of the settlement, and the company would take a $60 million pretax hit to cover the remaining funds and other litigation costs. 

In the United States there are currently some 10,000 lawsuits filed against Fresenius alleging serious cardiac injury or death from its dialysis products. Much of the Granuflo litigation has been coordinated in Massachusetts court, where Judge Douglas P. Woodlock is presiding over cases. Plaintiffs argue that the dialysis additives caused metabolic alkalosis, which created a host of life-threatening issues such as:

• Hypokalemia
• Hypoxemia
• Hypercapnia
• Cardiac arrhythmia
• Cardiopulmonary arrest

One of the crucial pieces of evidence brought up in cases is an internal Fresenius memo in which company doctors noted a significant increase in sudden deaths among dialysis patients who were improperly dosed with Granuflo or Naturalyte. However, the memo was only sent to the company’s own dialysis centers, leaving non-Fresenius clinics and regulatory agencies in the dark. The FDA began an investigation after getting a copy of the document anonymously, which sparked a Class 1 recall of both products.

Fresenius says internal memo was incorrect

Fresenius spokesman Kent Jarrell said the memo was incorrect and later refuted by further analysis. He added that the GranuFlo warning label updates in 2012 were eventually removed from product packaging. “Fresenius deeply regrets the confusion and concern temporarily generated by the November 2011 memorandum,” he told the New York Times in an emailed statement.

In one of the first Granuflo lawsuits to go before a jury, the Massachusetts panel found that Fresenius was negligent in their actions regarding the memo, but did not directly attribute the decedent’s death to GranuFlo. The plaintiffs were not awarded any monetary damages.

Since Fresenius prevailed in the first bellwether trial, why is the multi-national company considering settling to the tune of 250 million dollars? According to Jarrell, the company simply wants to put an end to pending (and potentially costly) litigation.

If the settlement proceeds and at least 97 percent of claimants agree to the terms proposed by Fresenius, each plaintiff would recover roughly $25,000 in damages.

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