The Alaris system has been much maligned over the past few years. Its troubles date back to a Class I recall in early 2020. The recall, which centered around multiple system errors, software errors, and use-related errors, led to a long-term shipping hold on the pumps.
BD’s recall centered around multiple system errors, software errors, and use-related errors. BD cut its financial outlook for that year after it enacted a hold of new shipments of Alaris pumps. The company applied for a new FDA clearance for the pumps in April 2021. It started a remediation effort in July 2021.
In August 2022, a federal judge in New Jersey ruled that a lawsuit against BD over how it communicated company performance amid its Alaris problems may proceed.
BD resumed Alaris distribution after receiving updated FDA clearance in July, seemingly putting those issues in the past. Still, a class action lawsuit alleged that BD failed to disclose various Alaris defects. The suit alleged that the company made changes to Alaris products over a five-year period without FDA approval.
Details of the BD settlement
In an SEC filing, the company said it filed documents seeking approval from the U.S. District Court for the District of New Jersey. BD aims to resolve the class action related to certain public statements by the company around the infusion pumps. Pursuant to the agreement, the company agreed to pay $85 million to resolve all claims.
BD says the amount in the settlement is “adequately reserved” and not material to its financial results, cash flow or capital allocation strategies. The company and its officials denied any wrongdoing throughout the process. There remains no admission of liability in connection with the resolution of the matter.
“BD has elected to settle this matter in order to avoid the burden, expense, uncertainty, and risk associated with a continuation of the litigation,” the company’s filing says.
If approved by the court, the settlement resolves all claims in the litigation titled “Pensionsforsikring v. Becton, Dickinson and Company, et al.” This suit was filed on Feb. 27, 2020.
BD noted that the settlement does not resolve currently pending derivative actions, for which the company says “there are meritorious defenses.”
