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DePuy Orthopaedics Sets Aside $3 Billion to Settle Lawsuits

xray showing a defective hip implant

Johnson & Johnson announced in its most recent quarterly report that it has set aside $3 billion to settle lawsuits, some from its recalled ASR replacement hip system. But product liability experts wonder if that will actually be enough to cover costs and compensate victims.

DePuy Orthopaedics, a subsidiary of Johnson & Johnson, recalled 93,000 ASR metal hip implants in August 2010. The devices included in the recall are the ASR XL Acetabular System, a socket used in total hip replacement surgeries, and the ASR Hip Resurfacing System, a partial hip replacement used to preserve the bone.

Together, the devices created excessive friction, releasing metal fragments into patients’ blood, and they had a high failure rate. Researchers found 13 percent of patients would need a second corrective surgery within five years. The ASR metal hip implants were used between 2005 and mid-2010.

One indication of the total potential settlement value could be the lawsuit settlement funding industry’s view of DePuy. Legal-Bay LLC, a leader in lawsuit funding for DePuy, recently announced that it has secured $2.5 million in financing just for DePuy pre-settlement costs.

Patty Kirby, director of client relations at Legal-Bay commented, “Our research has indicated the average settlement amounts of the DePuy cases will top the Sulzer $200,000 average. Cases in which the patient had the implant and revision surgery could have values close to $1 million each.”

With the Sulzer Orthopedics joint recall in 2001 that Kirby mentioned, the Swiss company settled with patients for $1 billion. The voluntary recall was because of a manufacturing defect in which a small amount of mineral oil-based lubricant remained as residue on the hip socket. Only certain lot numbers of Sulzer’s Inter-Op acetabular shells from 1997 to 1999 were affected by the recall.

The DePuy hip implant recall is three times the size of Sulzer’s.

Confirming its credibility, Legal-Bay was correct when it forecast that GlaxoSmithKline would settle Avandia lawsuits for more than $2 billion. Recently, Glaxo settled 25,000 claims related to Avandia through mediation for what is being reported as close to $3 billion. Avandia is a drug used by diabetics, but the U.S. Food and Drug Administration has found it to cause heart damage and liver failure.

Unfortunately, the number of lawsuits and the cost of the claims against DePuy Orthopaedics is still unknown, 18 months after the recall. Furthermore, the $3 billion that was set aside has not been earmarked solely for DePuy hip implant lawsuits, so it’s difficult to say with certainty if it will cover all the forthcoming claims.

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