Johnson & Johnson Sets Aside Funds for DePuy ASR Hip Implant SettlementsJan 26, 2012 | Parker Waichman LLP
It looks like Johnson & Johnsons may be getting ready to settle some of the lawsuits filed over its DePuy Orthopaedics unit's recalled ASR hip implants. According to its earnings statement for the fourth quarter of 2011, Johnson & Johnson has taken a quarterly charges of more than $3 billion, mostly related to the DePuy ASR Hip Implant recall.
Among other things, the charge will allow Johnson & Johnson to set aside money for patients and lawyers involved in product liability litigation sparked by the worldwide DePuy ASR Hip Implant recall issued in 2010, The New York Times said. Of the total, $800 million was set aside to cover the medical costs of the recall.
According to a Reuters report, Morningstar analyst Damien Conover predicted that "J&J is getting ready to offer some settlements" to people injured by the defective hip implants. Roughly 93,000 ASR Hip Implants were placed in patients before they were recalled.
That charge, along with others taken in relation to recent recalls of over-the-counter drugs made by its McNeil Consumer Healthcare division and other issues, weighed on Johnson & Johnson's bottom line. In its fourth quarter earnings statement, Johnson & Johnson said the company earned $218 million in the quarter compared with the $1.9 billion it earned just a year earlier.
"The hip recalls worry me because their eventual costs are unknown," said Jeff Jonas, an analyst at Gabelli & Company, according to The New York Times.