Johnson & Johnson weighs $250M settlement to resolve more hip implant claims

Johnson & Johnson's ASR all-metal hip implant--Courtesy of Johnson & Johnson

Long plagued by suits over its metal-on-metal hip implants, Johnson & Johnson ($JNJ) is weighing a $250 million settlement to resolve more claims that were not covered under an earlier accord.

The New Brunswick, NJ-based company's DePuy unit is considering settling more than 1,000 suits over ASR hip implants that were excluded from a $2.5 billion settlement last November and extending settlement terms for patients who had implants removed before August 2013, people familiar with the matter told Bloomberg.

In August 2013, the FDA rolled out more stringent regulations for metal-on-metal hip implants, prompting J&J to stop selling its metal-on-metal hip implant products. Last November, J&J/DePuy agreed to fork over $2.5 million to settle thousands of lawsuits alleging injuries caused by its ASR all-metal hip implants, but still faces remaining claims. The company in 2010 recalled 93,000 of the implants, citing a 12% failure rate within 5 years.

If J&J decides to resolve the additional suits, it will have settled nearly 75% of its total U.S. caseload, but the total cost of settlements related to its ASR hip devices may surpass $4 billion by the time the company crosses the legal finish line, University of Richmond law professor Carl Tobias told Bloomberg.

"This is a sign that J&J is trying to get a solid handle on its whole ASR problem," Tobias said, as quoted by Bloomberg. "They are not done paying yet, but they are moving in the right direction."

The news comes on the heels of good tidings for J&J/DePuy, as the company recently won the first case to go to trial for a line of its metal-on-metal hip implants. A Texas jury last week ruled that J&J's Pinnacle line of Ultamet artificial hips did not have design defects and that the company sufficiently warned patients and doctors about the devices' risks, denying the plaintiff's request for $1.5 million in damages. But J&J still faces 6,000 lawsuits over its Pinnacle hip implants, including some cases consolidated before U.S. District Judge Ed Kinkeade in Dallas.

J&J is not the only one dealing with claims related to all-metal hip products. Stryker ($SYK) and Biomet are also facing legal pushback for metal hip implants, countering suits in court or in some cases, settling claims. Earlier this year, Stryker settled 8 of nearly 1,500 lawsuits alleging it sold faulty metal hip devices to consumers. The company in 2012 voluntarily recalled its Rejuvenate and ABG II metal hip implants after reports of problems, costing the company $700 million in charges.

- read the Bloomberg story

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