Stryker Settles Metal Hip Lawsuits

Stryker Corporation and lawyers representing patients suing the company over its metal-on-metal Rejuvenate Modular-Neck and ABG II Modular-Neck hip implants have settled the claims for approximately $1.4 to $2.3 billion.

Stryker voluntarily conducted a worldwide recall of the products in July 2012.

According to a November 3, 2014 company announcement, Stryker has recorded charges totaling $1.425 billion, representing the low end of the range of probable loss to resolve the lawsuits. “The ultimate cost to entirely resolve these matters will depend on many factors that are difficult to predict and may be materially different than the amounts accrued to date. Further charges to earnings may need to be recorded in the future as additional information related to patient enrollment in the Settlement Program becomes available. It is expected that a majority of the payments under the Settlement Agreement will be made by the end of 2015.”

Payments per Case

The company did not provide an estimate of how many people may have been affected or how many may be compensated. It also did not offer a representation of how much individuals stand to receive. A statement from the lawyers for one plaintiff said that Stryker will provide a base payment of $300, 000 to patients who received the implant and underwent revision surgery to remove and replace the devices.

In a June report, MT Services LLC reported that some cases involving revisions of the hips could be worth more than $500, 000.

Settlement Program

Eligible U.S. patients are those who had surgery to replace their Stryker hip stems prior to November 3, 2014. According to Stryker, patients eligible for compensation should talk with their attorneys, if they have one, or contact the Settlement Program claims administrator at www.strykermodularhipsettlement.com or 1-855-382-6404. Patients do not need an attorney to participate in the Settlement Program.

Bill Huffnagle, president of Stryker’s Reconstructive Division said following the company’s voluntary recall and patient support program for recall related care, this settlement provides patients “compensation in a fair, timely and efficient manner.”

Metal-on-Metal Saga

Johnson & Johnson’s DePuy Synthes division announced a $2.5 billion agreement last November to resolve 8, 000 lawsuits over its all-metal ASR implant. A federal jury sided with the company last month in a bellwether lawsuit over its Pinnacle hip metal-on-metal implant.

Barry Meier of the New York Times reported on November 3 that all-metal implants once accounted for about one of every three devices used in the estimated 250, 000 hip replacement procedures that are performed annually in the U.S. Device companies stopped marketing the devices after evidence emerged several years ago that the metal components could rub together, creating tiny particles of metallic debris that could severely damage a patient’s tissue and muscle. Surgeons stopped using the devices in most cases.

Stryker Impact

Bank of America analyst Bob Hopkins said Stryker currently has $4.7 billion in cash and is repatriating $2 billion in cash in 2015. Hopkins says this settlement payout could limit Stryker’s strategic flexibility, but Stryker could still find a way to make a larger transaction work if the “strategic rational and return profile were right.”

A mediation process in New Jersey where the multicounty and federal multidistrict lawsuits were filed is credited with getting the parties to agree to the settlement.