As the number of lawsuits against DePuy and its parent
company Johnson & Johnson increase, one can only wonder if this increased
litigation is responsible for the huge amount of money Johnson & Johnson
continues to set aside. The DePuy ASR hip implant was recalled in 2010 after it
was found the metal components were rubbing against one another, causing tiny
metal ions to shear away from the hip implant and become lodged in the
surrounding tissue or enter the bloodstream. The cobalt and chromium ions in
the tissues led to hip failure, necrosis, bone loss, inflammation and chronic
pain in many recipients of the ASR and Pinnacle systems.
Other recipients of the hip implants develed metal
toxicity from the cobalt and chromium which migrated to the bloodstream.
Symptoms of metal toxicity are serious, and the heavy metals can build up to
dangerous levels in a recipient’s body before without their realizing it. Once
the damage has been done by these toxic metals, there is little way to undo it
other than have the implant recipient undergo a revision surgery to remove the
metal parts which are causing the adverse health problems.
As of a few short months ago over 6,000 people across
the United States filed lawsuits against DePuy and Johnson & Johnson
regarding the ASR while another 1,800 have filed suit claiming the DePuy
Pinnacle hip implant to be defective as well. Following the recall, DePuy indicated
it might consider reimbursement for medical expenses the company deemed
“reasonable,” however in order to receive this nominal compensation, hip
implant victims were forced to sign away very important rights.
The DePuy metal-on-metal hip implants which have
caused the problems—the Pinnacle and ASR—could lead to many recipients having
to undergo a second surgical procedure to remove the defective hip. This past
August, DePuy and Johnson & Johnson entered into the first agreement to
settle an ASR lawsuit, ending a case brought by three people in Nevada state
court. Another state court case is scheduled to begin in early 2013 in
Maryland, and the combined multi-district litigation ASR cases will begin in May,
2013, with the second round starting in July, 2013.
Johnson & Johnson reportedly paid over $600,000 to
settle the three Nevada cases, and such outcomes allows plaintiffs and
defendants to gauge how juries are likely to respond to subsequent cases. At the
beginning of January, 2012, Johnson & Johnson set aside $4,608,000,000 in
anticipation of continued litigation regarding the ASR and Pinnacle. Just this
September, at the end of J & J’s third 2012 quarter, approximately two
billion more was set aside, bringing the total to $6,498,000,000. Many are
beginning to wonder if this staggering amount of set-aside money is directly
related to Johnson & Johnson’s mindset regarding the outcome of future
litigation.
Despite the troubles DePuy has suffered with the recall
of the ASR in August, 2010 and subsequent issues with the Pinnacle implant,
Johnson & Johnson sales reached $17.1 billion dollars for 2012 at the end
of the third quarter which was a $6.5% increase over the prior year. A mere $800 million of the staggering
set-aside has been earmarked for medical costs related to the ASR hip implant
recall. The fact that the Nevada cases settled for roughly $200,000 each and
there are an estimated 8,000 lawsuits left to settle, only amounts to $1.6
billion if you assume further cases will settle for approximately the same
amount.
This begs the question of why Johnson & Johnson
has set aside over $6 billion dollars in anticipation of lawsuits and
settlements. Are they planning to fight all consolidated MDL cases to the
bitter end, or do they expect to settle with each plaintiff for more than the
$200,000 received by the Nevada plaintiffs? Only time will tell.
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