Patient anger could scuttle J&J's $2.5B hip settlement

Johnson & Johnson's ($JNJ) $2.5 billion-plus agreement to settle as many as 8,000 lawsuits over faulty metal hip implants made by its subsidiary, DePuy, is already getting pushback. Patients complain their attorneys and the company itself gain more than they do from the deal, and if discontent rises, it could place the overall agreement at risk.

As The New York Times reports, the settlement breaks down to a $2.5 billion-plus payment, plus a $475 million extra pool of money to compensate patients facing the worst injuries involving the now-recalled ASR hip implants and any removal or replacement surgeries that followed. But the plaintiff's attorneys stand to earn about one-third of the total--roughly $800 million, according to the article. That means the average payment to patients drops from about $250,000 to roughly $160,000 once attorneys' fees are factored in. Some payments could go even lower based on a formula that factors in patients' ages, weights, whether they smoked and how long they endured the affected implant before it was removed (the longer the implant stayed in, the smaller the award).

The thing is, 94% of eligible patients must support the settlement for it to go forward, according to reports. But The New York Times interviewed a number of plaintiffs who have already declined to take the settlement because of how it is structured. They said it was unfair or "a joke" and pledged to keep fighting.

Some attorneys facing pushback over the settlement are quoted as saying they'll work on convincing their clients, promoting the deal as something that offers certainty and a vital cash payment that can make a difference. At least one attorney told the NYT he would encourage clients with potentially higher-value claims to not participate and to hold out for separate deals or a trial. Discontent could rise to the point that the agreement never becomes finalized. J&J's legal woes could continue to mushroom as a result.

As it is, the agreement already leaves out 4,000 patients with ASR hips who are suing J&J but haven't had hip removal surgery yet. Additionally, there are others who haven't sued yet but still have the right to.

Unusually high failure rates involving the ASR metal hips led to a 2010 recall of 93,000 of the devices, 37,000 of which were in the U.S. Legions of patient lawsuits followed and J&J's competitors are facing similar legal action involving their own metal hip implants.

- read the NYT story (sub. req.)

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