Johnson & Johnson (NYSE:JNJ) subsidiary DePuy Orthopaedics last week committed to the deal it struck last year to settle thousands of product liability lawsuits filed over its recalled metal-on-metal DePuy ASR hip implant.
DePuy Orthopaedics told the U.S. District Court for Northern Ohio, which is overseeing a multi-district litigation over the DePuy ASR device, that it’s waiving the walk-away rights allowed for in the settlement if too few DePuy ASR plaintiffs signed on. Although patients are still enrolling in the settlement program, "most eligible patients have opted into the program," according to court documents.
"The company is, therefore, moving forward before the June 1, 2014, decision deadline provided for in the agreement. The exact timing and amount of compensation will depend on a number of factors and circumstances specific to each claim. However, eligible patients with allowed claims can expect payment now that there is certainty the program is moving forward," wrote Judge David Katz. "The court wants to thank all the parties for their continued cooperation since the agreement was announced on Nov. 19, 2013, that has allowed for this significant milestone to be reached."
The settlement deal reportedly will see Johnson & Johnson pay out $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. 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, 2013.
At an estimated $2.5 billion, the deal is by far the largest medical product liability settlement ever, more than double Sulzer Medica’s $1 billion settlement over its recalled hip implant in 2002. That recall involved roughly 31,000 devices, compared with the recall of about 93,000 DePuy ASR implants.
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