Inari Medical Seeks Dismissal of Investor Lawsuit Over Alleged Improper Payments

Inari Medical Inc. and several of its former executives are mounting a vigorous defense against a class action lawsuit filed by investors. The plaintiffs allege that illicit payments to physicians artificially inflated the company’s sales performance. The defendants formally submitted a motion to dismiss the case yesterday.

The legal challenge stems from a past investigation concerning compliance with US Anti-Kickback laws, an event that previously negatively impacted the company’s share price. The lawsuit accuses the medical device firm of manipulating its financial results and product sales through what it describes as “bribes and other improper and illegal payments to healthcare providers.”

Central to the defense’s motion to dismiss is the argument that the lawsuit lacks the requisite specificity to substantiate claims of statutory violations. The filing contends that the complaint fails to provide essential details, including any named specific incidents, precise dates, locations, or the identities of physicians allegedly involved.

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The company maintains that its physician training and marketing initiatives are standard, lawful practices within the industry. It further argues that covering travel, lodging, and meal expenses for participants in these programs does not constitute illegal kickbacks. Inari Medical’s legal team emphasizes that the plaintiffs have not successfully demonstrated how otherwise legitimate marketing expenditures crossed a line into illegality.

These legal proceedings pertain to a period preceding the company’s acquisition by Stryker Corporation. The medtech giant completed its takeover of Inari Medical in early 2025, paying $80 per share in a deal valued at $4.9 billion. Since February, Inari has been operating as a subsidiary of Stryker.

Despite the change in ownership, these historical liabilities persist. The lawsuit explicitly focuses on the company’s past operations and could still have financial repercussions for the historically separately traded Inari Medical stock.