Official J&J Announcement: $2.5 Billion Hip Implant Lawsuit Settlement

Contrary to reports last week from anonymous Bloomberg sources, Johnson & Johnson announced Tuesday it has struck a nearly $2.5 billion deal to settle lawsuits from patients who claim they were injured by its metal-on-metal hip implant and required surgery to remove and replace the allegedly faulty device.

DePuy Orthopaedics Inc., a division of Johnson & Johnson, faces an estimated 12,000 lawsuits in the U.S. from patients who claim they sustained a variety of injuries, including side effects from metal poisoning and muscle and tissue damage, from the company’s allegedly defective ASR metal-on-metal hip implant. According to the New York Times, the settlement will be divided among nearly 8,000 patients who underwent revision procedures after experiencing complications with the now-recalled device.

For the settlement to be verified, it must receive support from at least 94 percent of eligible claimants. The reported settlement amount, however, is said to only cover those whose injuries were severe enough to require revision surgery. Though the remaining 4,000 patients are not covered by this settlement, there is a provision in the agreement to add an additional $250,000 to the deal for each patient who undergoes a revision procedure before the settlement program ends. Some speculate, however, that there is a chance the settlement may not be approved, as many patients could opt to pursue a higher amount in damages through individual lawsuits. Another reason claimants may not support the settlement, the Times report continued, is that some would be expected to receive reduced payouts due to a term in the agreement that bases a patient’s level of compensation on how long they had the implant.

According to people familiar with the negotiations, the total cost to resolve the suits could swell to $3 billion due to Johnson & Johnson’s agreement to cover all patient medical costs related to revision procedures. Under the terms of the settlement, each patient would receive about $250,000—not $300,000 as previously reported—in pain and suffering damages before legal fees. To date, Johnson & Johnson has reportedly spent an estimated $993 million to cover patient medical bills and other expenses related to the 2010 recall of its controversial metal-on-metal hip implant.

Though the average patient award is $250,000, that amount may be reduced for those who had the device without complications for a longer period of time. For example, a patient who lived with an ASR hip for five to six years would see their award reduced to $225,000. Additionally, depending on the severity of their injuries, some patients may qualify for additional compensation from a separate $475 million supplemental fund set aside specifically for those who sustained more significant injuries related to the implant or revision surgery.