J&J Said to Agree to $4B Settlement Over DePuy ASR Hip ImplantsNov 13, 2013
In a history-making accord, Johnson & Johnson, the world’s largest health care products maker, is said to have agreed to settle thousands of lawsuits in a multi-billion-dollar deal. The litigation was brought over the notorious DePuy ASR metal-on-metal hip implant device.
Three people familiar with the deal told Bloomberg.com that the accord is the largest in the United States involving legal claims brought over a medical device. The three were speaking on the condition of anonymity as they were not authorized to speak publicly on the matter. The accord settles more than 7,500 lawsuits brought against J&J’s DePuy Orthopaedics unit that were filed in federal and state courts nationwide.
On average, $300,000 will be paid for each of the surgeries involving the ASR devices, the people told Bloomberg.com. Also, the accord does not prevent patients who may suffer future hip device failure, from seeking additional compensation. In other words, the multi-billion-dollar accord was not constructed with a total value cap. An announcement on the settlement is expected to be made in Toledo, Ohio, federal court next week.
The people pointed out to Bloomberg.com that the DePuy accord indicates that 94 percent of eligible claimants must sign up for the settlement or the firm can withdraw from the agreement.
Carl Tobias, who teaches product liability law at the University of Richmond in Virginia, told Bloomberg.com that the agreement “resolves a lot of litigation that could have dragged on for years and cost J&J much more money in the long run.” He also pointed out that, “It’s certainly a lot of money, but there are whole bunch of people who contend these hips caused grievous injuries…. So some of them may feel like this isn’t enough compensation for what they’ve gone through.”
In 2010, the company globally recalled 93,000 ASR hip implant devices. At the time of the recall, J&J indicated that 12 percent of the ASRs failed within the first five years; however, internal J&J documents revealed that 37 percent of the ASR hips failed within 4.6 years of original implantation. By 2012, the ASR failure rate in Australia reached 44 percent in just seven years, according to Bloomberg.com.
DePuy’s metal-on-metal hip implant devices were introduced in 2005 and were advertised to last 20 years. The devices were also touted to provide increased range of motion when compared to traditional devices. Device failure reports mounted, as did related injury reports and litigation. Patient allegation include reports of dislocations and fracture; pain and swelling; metallosis (metal poisoning); difficulty balancing, ambulating, standing, and rising; popping noises emanating from the joint; and pseudotumors, to name just some.
Patients have also alleged that debris released from the hip device’s chromium and cobalt components have led to tissue death and increased blood metal ion levels, according to Bloomberg.com. Ions release when the device’s components wear against one another during typical activities; for instance, walking.
The device maker is facing nearly 12,000 lawsuits that have been filed in federal and state courts in Ohio, California, and New Jersey, wrote Bloomberg.com. U.S. District Judge David Katz, in Toledo, Ohio, is coordinating the federal litigation, which requires the judge’s approval.
The three people speaking to Bloomberg.com pointed out that claims in the remaining cases that may be potentially filed by patients who are concerned that that they may need future revision surgery would be managed in a second round of settlements. For this $4 billion settlement, claims will be structured to provide compensation to hip patients based on the patient’s age, injuries, and revision surgery history. The settlement also provides more compensation to patients who have suffered from “extreme injuries” that are tied to device failure, as well as to patients who underwent long hospitalizations after removal of the defective ASR devices.
The device maker has also agreed to set funds aside to cover Medicare and other insurer reimbursement over claims paid on behalf of all-metal hip implant patients. The people advised Bloomberg.com that that portion of the agreement could potentially add hundreds of millions of dollars to the settlement’s value.
Prior to this accord, J&J lost one trial and won a second trial. The device maker had also scheduled seven more trials over the ASR devices. The ASRs were constructed in two similar models—the ASR XL Acetabular System and the ASR Hip Resurfacing System.
Meanwhile, earlier this month, J&J announced another multi-billon-dollar agreement in which the health care giant agreed to pay $2.2 billion to resolve criminal and civil probes into the way in which it marketed drugs, one of which is its antipsychotic, Risperdal.