|Endo agreed to pay $830 million to settle a majority of its pending vaginal mesh lawsuits.--Courtesy of Endo|
Endo Health Solutions ($ENDP) is nearing the end of the road in its ongoing vaginal mesh saga. The company will pay $830 million to settle 20,000 lawsuits, resolving a "substantial majority" of its vaginal mesh-related cases, it said in a statement.
Endo will incur an incremental pretax, noncash charge of approximately $625 million in the first quarter of 2014 and expects to pay $1.1 billion through 2016 to settle claims related to vaginal mesh products sold by its American Medical Systems unit. The company had previously stockpiled $520 million to cover legal costs related to its vaginal mesh suits but disclosed in a regulatory filing in February that its reserve would likely grow.
"The increase in our reserve reflects management's ongoing assessment of our product liability portfolio, including vaginal mesh cases, the status of the company's ongoing settlement discussion related to vaginal mesh litigation and the inherent uncertainty as to the ultimate costs of resolving this litigation," AMS said in its regulatory filing.
The settlement marks the end of a long road for Endo, which has faced its fair share of legal woes since acquiring AMS for $2.9 billion in 2011. Patients began filing suits against AMS in 2008, claiming that the company's vaginal mesh devices caused pain, incontinence and organ damage. In June 2013, the company's AMS subsidiary agreed to fork over $54.5 million to settle some of its pending vaginal mesh lawsuits, which at the time numbered in the thousands.
Endo is not alone in its struggle. Companies like Johnson & Johnson ($JNJ), Boston Scientific ($BSX) and C.R. Bard ($BCR) also face lawsuits related to vaginal mesh products. Some of the cases--including those faced by Endo--have been consolidated in Charleston, WV, before U.S. District Judge Joseph Goodwin. In February, J&J's Ethicon unit scored a victory, as Goodwin ruled after one week of testimony that the company's TVT Retropubic device did not cause injury.
Endo's AMS unit could also be jumping on the proverbial bandwagon, as rumors have circulated that vaginal mesh manufacturers are eager to lay claims to rest. In March, Danish devicemaker Coloplast paid $16 million to settle lawsuits over its vaginal mesh inserts, spurring talk of a global resolution.
"It appears that momentum is building for some type of global resolution as more of these vaginal-mesh cases settle," Carl Tobias, a product liability law instructor at the University of Richmond in Virginia, told Bloomberg in an email at the time of the settlement.
Officials at Bard, Boston Scientific, Coloplast and Endo declined comment or did not return calls, according to the Bloomberg article.