Johnson & Johnson (NYSE:JNJ) is making the unusual move of hiring an outside firm to manage the recall of its DePuy ASR hip implant, a decision that could limit its financial exposure – and limit patients’ access to replacement devices.
The New Brunswick, N.J.-based medical and consumer products conglomerate tapped Broadspire Services Inc. to handle patient claims associated with the recall. Companies typically handle such things in-house, accepting the judgment of physicians about whether a revision surgery is necessary.
The outsourcing deal means Broadspire’s doctors, not the patients’, will make the final call over whether the implant should be replaced. Although the Broadspire docs can’t over-ride a patient’s doctor, they do control the purse strings – meaning patients whose doctor decide a revision is in order, but who can’t afford it, could be out of luck if the consulting firm decides the revision isn’t warranted.
"Doctors who are evaluating these cases are being paid indirectly by DePuy, and research suggests that even when we are very well-intentioned we can be influenced by conflicts of interest," Kristin Smith-Crowe, associate professor of management at the University of Utah, told Reuters. "This is a bit of a red flag in terms of the way this situation is set up."
For its part, DePuy maintains that Broadspire’s involvement will ensure that any revision surgeries the company pays for are related to the recall and not to another problem, such as an accident or fall that damages the implant.
"Similar to the process insurance companies use to evaluate claims from subscribers, medical records are collected by Broadspire if a patient requests financial assistance," DePuy spokeswoman Lorie Gawreluk told the news service. "Broadspire requires no more information than a typical insurance provider would request, and like an insurance provider, Broadspire has a team of reviewers who review claims."
"To be very clear: the sole purpose of the Broadspire process is to assist patients and health care providers as efficiently as possible," Gawreluk added.
But patients and their lawyers say the move is part of a campaign to get out a head of the more than 2,000 lawsuits J&J is facing over the recall in state and federal courts.
"This is an evolving strategy that is outside the norm of what companies have done in the past," attorney Edward Blizzard, who’s representing plaintiffs in a lawsuit over the recall, told Reuters. "Normally a company would not get the kind of information Broadspire is asking for until a case was in litigation, and even if the case was in litigation, in no circumstance would the defendant be allowed to have their own physician talk to the patient’s physician privately, as Broadspire is demanding."
"I have been doing this work for 35 years and it is almost unprecedented for a large corporate defendant to run out and preemptively attempt to identify potential claimants," added Alex MacDonald, a lawyer who helped negotiate billions of dollars in settlements over the diet drug Fen-Phen (MacDonald is not representing anyone in the DePuy case). "J&J is reaching out to doctors and asking them to use their influence with their patients in the hope that the doctor will help identify potential claimants in a lawsuit."
About 93,000 people were implanted with the DePuy ASR hip system worldwide before the company issued a recall of its ASR XL Acetabular and ASR Hip Resurfacing systems last year, “due to the number of patients who required a second hip replacement procedure.”
“New, unpublished 2010 data from the National Joint Registry (NJR) of England and Wales shows a five-year revision rate of approximately 12 percent for the ASR Hip Resurfacing System and approximately 13 percent for the ASR XL Acetabular System,” the company said at the time. “These revision rates are across the entire size range. The risk for revision was highest with ASR head sizes below 50 mm in diameter and among female patients.”
Lawsuits began piling up around the country almost immediately; by late last year, a multi-district litigation system was put in place to bring many of those cases under one court, the U.S. District Court for Northern Ohio.
That could add up to a big nut for J&J to swallow, based on the experience of Sulzer Medica AG in 2001. The Swiss medical device maker’s recall of a hip implant, placed in about 31,000 patients, settled in 2002 for $1 billion (about 2,760 patients had revision surgeries attributed to that recall, according to Reuters). The DePuy ASR recall is three times the size of the Sulzer pullback.
DePuy introduced the ASR in the U.S. in 2005 after winning 510(k) clearance from the Food & Drug Administration for the products.
Hudson Surgical sues Smith & Nephew over knee implant IP
Hudson Surgical Design Inc. is going after one of the biggest names in orthopedic devices, filing a lawsuit accusing Smith & Nephew (NYSE:SNN) of violating one of its patents for knee implants.
The lawsuit, filed in the U.S. District Court for Western Washington, accuses the British health products giant of infringing Hudson’s patent for "Methods and Apparatus for Orthopedic Implants," issued June 8. The suit alleges that the cutting blocks used with SNN’s Profix, Genesis II, Legion and Journey BCS total knee replacement systems (plus its Visionaire Patient Matched tibial cutting blocks) violate the patent.
Hudson surgical is seeking a jury trial, a ruling of willful infringement, an injunction barring further infringement, triple damages and legal fees.
Essential Medical Devices: Masimo’s pulse oximetry device violates our patent
Hudson Surgical isn’t alone in its willingness to take on a huge player in its industry: Essential Medical Devices Inc. is also suing over an intellectual property issue, setting its sights on Masimo Corp. (NSDQ:MASI) and that company’s pulse oximetry devices.
The story begins in March 2009, when Essential offered to sell Masimo its patent for a "Non-Invasive Carboxyhemoglobin Analyzer." The suit accuses Irvine, Calif.-based Masimo of infringing the patent and of contributing to its infringement by other parties.
Essential Medical wants a jury trial, judgments of direct, induced and indirect infringement, triple damages and legal fees.
9th Circ. strikes down Washington law limiting PCIs
The U.S. Court of Appeals for the Ninth Circuit struck down a Washington state law limiting the number of elective percutaneous coronary interventions hospitals can perform.
The case involves a quota system the Evergreen State put into place in 2008, seeking to limit the number of unnecessary PCIs. Under the provisions of the system, a health care provider can only win a certificate of need to perform more than 300 PCIs in a year. Such a certificate can only be granted if the projected need for more PCIs tops 300; under that rubric, plaintiff Yakima Valley Memorial Hospital "has no hope of receiving a certificate of need in the near future," according to court documents.
The hospital argued that the system violates the Commerce Clause and anti-competition statutes. A lower court disagreed, ruling that the quota system doesn’t break the anti-monopoly Sherman Act or the Commerce Clause’s bar on restricting inter-state trade.
"We agree that Memorial failed to state a claim of antitrust preemption because the PCI regulations are a unilateral licensing requirement rather than an agreement in restraint of trade,” according to the appeals court’s ruling “We also agree that Memorial has standing under the dormant Commerce Clause, but we reverse the district court’s judgment on that claim because the Department failed to prove congressional authorization for the PCI regulations.”