Johnson and Johnson considers $3 billion settlement for defective metal hip implant

DePuy ASR hip recall 435x369 Johnson and Johnson considers $3 billion settlement for defective metal hip implantJohnson & Johnson is considering shelling out more than $3 billion to settle lawsuits related to a faulty all-metal hip replacement system. The payout is about 50 percent higher than the company proposed in previous discussions, and would resolve as many as 11,500 lawsuits in the United States, at more than $300,000 per case. If accepted, the settlement would be the largest involving artificial hips.

The lawsuits allege that the metal-on-metal ASR hip replacement system, made by Johnson & Johnson subsidiary DePuy Orthopaedics, was defectively designed, which caused the devices to fail at a higher than expected rate. Thousands of patients had to undergo revision surgery to remove and replace their devices, and many experienced tissue death and blood poisoning when the all-metal devices corroded in their bodies. Johnson & Johnson recalled the ASR hip implant in 2010, a move that affected an estimated 93,000 people worldwide, including about 37,000 in the United States.

Johnson & Johnson has already spent about $993 million to inform patients and surgeons about the recall and to cover associated medical costs. The company also set aside money for litigation, the amount of which is undisclosed but, Johnson & Johnson says, has increased since June 30.

The first Johnson & Johnson metal hip implant lawsuit to go to trial resulted in an $8.3 million verdict against the company. The defendant won the second case. Seven other trials are scheduled to be heard in coming months and could reveal just how generous the world’s largest consumer health care products producer might be willing to be when it comes to settlement negotiations.

Other items Johnson & Johnson will likely consider include the number of years that the company may have to pay future claims, whether the settlement includes reimbursing Medicare for claims paid, and whether extra compensation for extreme medical care would be considered.