Johnson & Johnson Said to be Considering $3 Billion Settlement in Hip Implant Case

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johnson_and_johnson_considering_large_settlementAccording to people familiar with the matter, Johnson & Johnson, the world’s largest seller of health-care products, has discussed paying more than $3 billion to settle lawsuits over its recalled DePuy hip implant devices.

J&J seeks to resolve as many as 11,500 lawsuits in the U.S. and has considered paying more than $300,000 per case, Bloomberg News reports. This settlement would exceed $3 billion if most plaintiffs accept the terms and is an amount 50 percent larger than that proposed in previous discussions.

Johnson & Johnson’s DePuy unit, manufacturer of the hips, recalled 93,000 implants worldwide in 2010, including 37,000 in the U.S.  More than 12 percent of the implants failed within five years. That rate is climbing, along with lawsuits by patients blaming the metal-on-metal devices for pain, metal poisoning, and the need for replacement surgeries. A DePuy spokeswoman says the company has spent about $993 million on medical costs and informing patients and surgeons about the ASR recall, according to Bloomberg News.

Any agreement would be affected by the outcome of seven product-liability trials scheduled to occur between September and January. J&J lost an $8.3 million verdict in the first case to go trial but won the second. In March, a California jury awarded damages to a retired Montana prison guard, ruling that the device was defectively designed, but six weeks later a jury rejected a defective design claim brought by an Illinois nurse.

Obstacles to a final settlement include the number of years J&J may potentially have to pay future claims and whether the settlement would include reimbursing Medicare for claims paid, according to Bloomberg News. In addition, compensation must be determined for extreme cases – dual hip surgeries, for example, or cases where infection required long hospital stays.

At issue with these hips is the high early failure rate: data from the UK indicate that 13 percent of DePuy ASR XL hips failed and needed revisions and 12 percent of the ASR Hip Resurfacing System implants failed in the first five years. In addition, plaintiffs allege that debris from the metal ball sliding against the metal cup causes tissue death around the joint and may increase the amount of metal ions in the bloodstream to harmful levels, Bloomberg News reports.