Johnson & Johnson ($JNJ) reportedly negotiated a deal that will, at long last, resolve more than 7,500 lawsuits from patients who had faulty all-metal hips made by the company surgically removed. Bloomberg broke the news, citing three anonymous sources. If true, the settlement is astoundingly high, worth more than $4 billion.
According to the story, the deal calls for payments of $300,000 on average to patients who had the J&J/DePuy division's ASR all-metal hips taken out, ending their state and federal court lawsuits. Additionally, patients who still have the affected implant can sue in the future if and when the product breaks down, sources told Bloomberg.
The New York Times reported that the plan must still win court approval.
Metal hips have been a disaster for J&J/DePuy, which recalled 93,000 ASR all-metal hip implants around the world in 2010 after news spread of high product failure rates and patient injuries. Of that number, more than 37,000 hit the U.S. market.
J&J settled at least two other metal hip lawsuits in October. News broke recently that the first federal trial against J&J involving the ASR hips had been delayed for as many as three months because of issues involving expert witnesses. Speculation reigned, however, that the U.S. District Court delay (in Ohio) could become permanent if the rumored settlement actually happened.
Johnson & Johnson reportedly started in late summer to consider a $3 billion-plus settlement, according to reports that broke in August. At that point, Johnson & Johnson said it had set aside close to $993 million to handle ASR patient medical costs and other related recall expenses.
For now, there are plenty of unanswered questions. Bloomberg reported that the settlement will be officially announced next week. But J&J may face up to 11,500 lawsuits in the U.S., and the rumored agreement doesn't appear to address all of them. As well, there is also the question of global lawsuits. J&J could not be reached for the Bloomberg story.
J&J isn't the only company hammered with legions of lawsuits over faulty metal hips. Stryker ($SYK), Biomet and others are also dealing with legal actions of their own, and it will be interesting to see if Johnson & Johnson's move to resolve the matter leads to similar settlement deals at other companies.
J&J has said it will depart the metal-on-metal and ceramic-on-metal hip implant business by the end of 2014, due to declining physician use and more stringent FDA regulations.
Editor's note: This story has been updated to include a reference to how the negotiated settlement must still win court approval.