Shareholders Allege Intuitive Concealed Safety Issues Associated with da Vinci Surgical Robot

Intuitive is facing a shareholder derivative lawsuit alleging that the company under-reported adverse events associated with the da Vinci surgical system and hid at least three recalls from the U.S. Food and Drug Administration (FDA). According to Mass Device, the suit was filed on behalf of the City of Birmingham Relief & Retirement System in the U.S. District for Northern California. The shareholders allege that Intuitive and its board failed “to make a good-faith effort to ensure that Intuitive complied with applicable laws and FDA regulations governing the safety of medical devices designed to protect the health of the American public,” according to court documents.  

Sunnyvale, California-based Intuitive manufactures the da Vinci surgical robot, which is touted as a means to conduct minimally invasive surgery. However, there have been many safety issues surrounding the system since it has been in use. There have been reports of burns and/or tears, punctured blood vessels, bowel injuries, excessive bleeding, vaginal cuff dehiscence and death associated with the surgical robot.

The shareholder lawsuit alleges that the company grossly underreported injuries and complications associated with the da Vinci. They allege that, among the events that they did report, they did so inappropriately by categorizing the events as “other” rather than “serious injury” or “death”. Furthermore, it is alleged that the company hid from the FDA at least 3 recalls warning hospitals that the “tip cover” of the da Vinci can malfunction and burn the patient’s tissue.

Three Intuitive executives, CEO Gary Guthart, CFO Marshall Mohr and chairman and former CEO Lonnie Smith, are also accused of some $113 million in insider trading in ISRG stock. Shareholders allege that they were able to sell their stock at an artificially inflated price because they knew the price would drop as soon as investors found out about the numerous safety and quality issues associated with da Vinci.

Intuitive is also facing at least two lawsuits from insurers who alleged that the company hid legal claims. Last November, the Illinois Union Insurance Co. filed a lawsuit in the U.S. District Court for Northern California alleging that the company only revealed 25 legal claims filed over da Vinci. Navigators Specialty Insurance Co. made similar allegations, according to Mass Device.

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