There is media speculation that Johnson & Johnson (J&J), and its subsidiary DePuy, are in active discussions to attempt a global settlement of their defective ASR metal on metal artificial hips.
J&J Potential Settlement North of $3 Billion
Apparently J&J has discussed paying more than $3 billion to settle lawsuits over its recalled hip implants. J&J is exposed to over 11,500 product liability lawsuits in the U.S. and is considering paying more than $300,000 per case.
According to experts, such a global settlement would surpass $3 billion if most plaintiffs accept the proposed terms, this valuation is 50% larger than previously proposed. Still, according to industry watchers, a $3 Billion is a drop in the ocean for the profits that J&J has generated from the sale of the recalled devices.
Settlement is Dependent on Trial Outcomes
Any settlement would be subjected to the outcome of 7 product-liability trials between September and January 2014.
J&J’s DePuy unit recalled 93,000 implants worldwide in 2010, including 37,000 in the U.S. The failure rate that patients and doctors were seeing dwarfed the official company failure rate.
Unacceptable Failure Rate at 5 Years
Unfortunately that failure rate is climbing, and some estimate as high as 40%-50% failure rate at 5 years. Patients are blaming the chromium and cobalt artificial hip devices for pain, metal debris, metallosis and replacement surgeries. To date, J&J and DePuy have not accepted liability for placing a defective hip device in the market place and cite “market conditions” for their recall.
J&J DePuy ASR Verdicts
J&J was hit with a $8.3 million verdict, earlier this year, in the first trial involving a retired Montana prison guard. The California jury found that the device was defectively designed, that DePuy properly warned of the risks, and that the company didn’t owe punitive damages.
DePuy is appealing that verdict. A Chicago jury ruled six weeks later for DePuy in rejecting a defective design claim by an Illinois nurse.
7 Bellwether Trials Scheduled
7 other trials are set for later in the year, the first is scheduled to begin September 9 in Cleveland. The plaintiff is Ann McCracken, 58, from New York, who needed two replacement surgeries or revisions after her ASR implant.
Trials also are scheduled in state courts in San Francisco in October; in Hackensack, New Jersey, in October and January; in West Palm Beach, Florida, in November; in Chicago in December; and in Los Angeles in January.
Federal Multidistrict Litigation
There are about 8,000 federal cases consolidated in the multidistrict litigation or MDL, in the Northern District of Ohio, for the pre-trial consideration.
About 2,000 cases are pending in the California Judicial Council Coordinated Proceeding before Judge Richard Kramer in San Francisco.
Any overall settlement would factor in age, severity of injuries and revision or replacement surgeries. Negotiators would rank those and other medical factors on a matrix or settlement grid.
Any settlement would have to incorporate future claims and repayment to third party medical insurance payors, for example Medicaid and Medicare for medical bills paid.
What is the Problem with DePuy ASR?
The J&J hips were made from a cobalt-and-chromium alloy used in two related models, the ASR XL Acetabular System and the ASR Hip Resurfacing System.
At the first trial in Los Angeles, plaintiff Loren Kransky argued that DePuy failed to test the device adequately before selling it in the U.S. in 2005, buried surgeon complaints of mounting failures, and studied a redesign of the ASR before scrapping that effort in 2008.
Patients claim that debris from the metal ball grinding against the metal cup causes tissue death around the joint and increase the amount of metal ions in the bloodstream to harmful levels. This is known as metallosis.
McCracken v. DePuy, 11-dp-20485, U.S. District Court, Northern District of Ohio (Toledo). The consolidated federal case is In re DePuy Orthopedics Inc., ASR Hip Implant Products Liability Litigation, 10-MD-2197, U.S. District Court, Northern District of Ohio (Toledo).