Analysts are predicting that Johnson & Johnson is preparing to offer some settlements for patients who received defective artificial hips from its subsidiary DePuy Orthopaedics. They say they were tipped off when the medical and consumer health products giant recently reported $3 billion in quarterly charges largely related to the recall of its DePuy hip implant and gave a 2012 earnings forecast below analysts estimates.
“The hip recalls worry me because their eventual costs are unknown,” Gabelli & Co. analyst Jeff Jonas told Reuters.
DePuy’s ASR XL hip replacement and resurfacing systems were recalled in 2010 after reports that the devices were failing at a faster than expected rate. The all-metal hip implants offered an alternative to traditional ceramic or plastic implants, however the design appears to be disastrous. Studies indicate bits of metal can flake off into the joint space, which may not only accelerate the failure of the devices but also cause a type of blood poisoning known as metallosis.
Patients have had to undergo revision surgeries to remove and replace their defective device. An estimated 93,000 people worldwide are affected by the recall.
Johnson & Johnson is trying to save face by offering to cover the cost of revision surgeries for patients who received the faulty hips, but hundreds of patients have chosen instead to file a lawsuit in hopes of collecting for damages beyond the cost of surgery.