Latest DePuy Hip Trial Set in LA, $2 Billion Settlement Rumored

The heat on Johnson & Johnson (J&J) to settle the DePuy ASR metal-on-metal hip lawsuits is building as the next trial is set to start on Friday, January 25, 2013, in a California state court. The figure of $2 billion for a potential settlement was being reported by Bloomberg News on January 19.

The impending trial has already produced a blockbuster disclosure that company officials at DePuy Orthopaedics, Inc. knew about problems with the implant in 2008, a year before stopping production and two full years before recalling the product in 2010. Approximately 37, 000 people in the U.S. and 93, 000 patients world-wide had the hips implanted.

Unsealed Documents

The news came after the judge unsealed documents for the trial involving Loren Kransky, who alleges his device failed within five years after he got it due to a design flaw. The trial date was reportedly moved up, as Mr. Kransky is suffering from cancer and may not have long to live.

The documents reportedly say that the company received clinical data showing “extreme” levels of metal ions in patients. “I believe it means that we need to start any ASR upgrade sooner than our previous plans had suggested, ” a DePuy official told colleagues in 2008, according to his unsealed deposition.

In addition, Paul Voorhurst, in a December 2012 video deposition acknowledged that 25-50% of the hips would be expected to fail under a Kaplan-Meier survival curve study done by the company before September 2011. Voorhurst has been the director, Biostatistics & Data Management at DePuy Orthopaedics for the last 15 years.

New York Times reporter Barry Meier reported on January 22 that in pretrial testimony a DePuy engineer stated that company officials were aware in 2008 of reports by an English surgeon that the resurfacing version of the ASR was releasing high levels of metallic ions, particularly in women. As a result of the reports, company officials felt they had to move quickly to redesign the implant.

The company “acted in the best interest of patients” in voluntarily recalling the all-metal hip parts and establishing a program to cover medical costs associated with the recall, said a J&J spokeswoman on January 22. She reportedly said the company plans to present evidence during the California trial that it “acted appropriately and responsibly.”

About 7, 000 of the ASR lawsuits have been consolidated in a federal court in Ohio. An additional 2, 000 cases have been consolidated in the California state court.

$2 Billion Settlement Negotiation

On January 19, Bloomberg reported that the company is negotiating a potential settlement with patients that may eventually total more than $2 billion, “according to five people familiar with the matter.” The company reportedly offered to pay more than $200, 000 a case, according to “the people, ” a deal which could exceed $2 billion if most plaintiffs accept the terms. Lawyers for hip recipients have so far rejected the offer as too low, “the people” said.

“The company can’t afford to defend these lawsuits case by case, ” said John M. Fitzpatrick, a defense lawyer at Wheeler Trigg O’Donnell LLP in Denver, according to the Bloomberg story. Fitzpatrick isn’t involved in any of the suits. “J&J needs to shut this down. The only way they can do that is through a global settlement. Plaintiffs’ lawyers know that. That’s why everybody has to push to see what they can get.”

Two previously scheduled trials in Las Vegas and Maryland did not commence or continue as the company offered a settlement in the Las Vegas suit and plaintiffs in the Maryland case withdrew their complaint and were expected to join in the federal court cases.

Johnson & Johnson certainly has a well-earned reputation for acting swiftly when patient safety is at stake. During the 1982 Tylenol scare, even though the company wasn’t responsible, it recalled about 31 million bottles of the drug and took a loss of over $100 million.