The investigation relates to prior public disclosures and SEC reporting regarding Alaris, an infusion pump system. BD neither admits nor denies the findings of an SEC order related to those matters occurring more than four years ago. The company has faced numerous setbacks with the Alaris platform, including a long-term shipping hold in 2020, since acquiring the technology from CareFusion in 2015.
Franklin Lakes, New Jersey-based BD agreed to pay $175 million to the SEC. This adds to an $85 million settlement to resolve a class action suit in New Jersey about a year ago. BD reserved and disclosed the payment in its 2024 Form 10-K and contemplated it in its 2025 cash flow plan. This update requires no financial restatements and the settlement amount does not impact the company’s investments or capital allocation. BD is not updating its 2025 guidance as a result either.
“The company believes that settling with the SEC is the right course of action to fully resolve this matter and move forward,” BD’s statement reads.
“BD has implemented a number of improvements to its operational and governance processes and related disclosure practices. BD is committed to operating with integrity and the highest ethical standards to produce high-quality, safe and effective products and serve as a trusted partner for its customers and their patients.”
More about how BD got here with Alaris
The Alaris system has been much maligned over the past few years. This goes back to a Class I recall in early 2020. That recall centered around multiple system errors, software errors, and use-related errors. It led to the long-term shipping hold.
BD cut its financial outlook for that year after initiating the shipping hold. 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. Still, the company faced the class action lawsuit alleging that it 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.
Since the company resumed Alaris distribution, though, it has reported growth with the platform. In its most recent quarterly earnings report last month, BD Medical segment registered 11.1% year-over-year growth. It attributed this to growth across medication delivery technology, including vascular access management, and double-digit growth in infusion, driven by Alaris.
