The Wall Street Journal is reporting that Johnson & Johnson (NYSE:JNJ) agreed to pay at least $2.5 billion to settle thousands of U.S. product liability lawsuits filed over its recalled DePuy ASR metal-on-metal hip implant.
The settlement would pay $250,000 each to about 8,000 DePuy ASR patients and set up a $475 million fund to cover extraordinary medical costs associated with the hip implants, the newspaper reported, citing "people familiar with the matter."
The timing and other terms of the settlement are still being hashed out, but a tentative deal was struck a few weeks ago. A federal judge in Toledo is slated to consider the deal today, according to the Journal.
If the settlement is approved, Johnson & Johnson would still be on the hook for about 4,000 other lawsuits filed over the DePuy ASR device, which it yanked in 2010 after receiving reports of unusually high failure rates. The deal wouldn’t cover hip-replacement surgeries performed after August 31, according to the anonymous sources.
Last week rumors surfaced that a settlement was in the offing that could have carried a $4 billion price tag for the New Brunswick, N.J.-based healthcare conglomerate. But even at $2.5 billion, the deal would be by far the largest medical product liability settlement ever, more than double Sulzer Medica’s $1 billion settlement of lawsuits involving its recalled hip implant in 2002. That recall involved roughly 31,000 devices, compared with the recall of about 93,000 DePuy ASR implants.
In October, J&J settled 1 lawsuit filed over the hip implant, a month after a federal judge delayed for a 2nd time the 1st bellwether trial in the multidistrict litigation over the DePuy ASR implant (other cases are proceeding outside of the MDL). The 1st trial over the DePuy ASR implant settled in August 2012 before it could go to trial. In March, a jury awarded another plaintiff, Loren Kransky, $8.3 million after deciding that the device was defectively designed (California Judge J. Stephen Czuleger rejected DePuy’s request for a new trial in May). In April, an Illinois state jury found for DePuy in Carol Strum vs. DePuy Orthopaedics & Premier Orthopaedic Sales.