By Jef Feeley
and David Voreacos
Johnson & Johnson will pay more than $4 billion to resolve thousands of lawsuits over its recalled hip implants in the largest settlement of U.S. claims over a medical device, three people familiar with the deal said Tuesday.
The accord will resolve more than 7,500 lawsuits in federal and state courts against J&J’s DePuy unit, said the people, who requested anonymity because they weren’t authorized to speak publicly about the settlement. Patients who’ve already had hips removed claimed in those cases that the implants were defective.
The company will pay an average of $300,000 for each of those removals, the people said. The agreement doesn’t bar patients whose hips fail in the future from seeking compensation from J&J, they said. That means the settlement is uncapped in terms of its total value, according to the people. The settlement is to be announced next week.
The agreement “resolves a lot of litigation that could have dragged on for years and cost J&J much more money in the long run,” said Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia.
Lawyers for patients claim debris created by the artificial hip’s metal ball sliding against a metal cup can cause tissue death around the joint, and may increase the amount of metal ions in the bloodstream to harmful levels.
The settlement follows another J&J agreement, announced Nov. 4, to pay $2.2 billion to resolve criminal and civil probes into the marketing of Risperdal, an antipsychotic drug, and other medicines.
The hip pact dwarfs a 2001 accord Sulzer AG reached with patients who claimed that company’s hip and knee implants were defective. Sulzer, a Winterthur, Switzerland-based pump maker, agreed to pay $1 billion to resolve those suits, then the largest settlement involving hip implants.
J&J’s DePuy unit recalled 93,000 implants in 2010, including 37,000 in the U.S., after more than 12 percent failed within five years. That rate is climbing, along with lawsuits by patients blaming the chromium and cobalt devices for pain, metal debris and replacement surgeries.
Mindy Tinsley, a spokeswoman for DePuy, declined to comment on the accord. J&J, based in New Brunswick, N.J., has spent about $993 million on medical costs and informing patients and surgeons about the recall, Lorie Gawreluk, another spokeswoman for the company, said earlier this year.
J&J fell 73 cents to $93.56 in New York Stock Exchange trading.