J&J Said to Announce $4 Billion Hip-Implant Pact Nov. 19

Johnson & Johnson (JNJ) will formally announce on Nov. 19 a settlement of more than $4 billion aimed at resolving thousands of lawsuits over its recalled hip implants, three people familiar with the matter said.

U.S. District Judge David Katz in Toledo, Ohio, will hear the settlement’s terms presented by attorneys for artificial-hip recipients and J&J, the world’s largest maker of medical products, said the people, who requested anonymity because they weren’t authorized to speak publicly.

Katz has scheduled an “open status conference” on that day, according to the court records. Under the settlement, J&J will pay an average of $300,000 or more to the more than 7,500 patients who had defective hips removed, the people said.

The pact also provides more money to hip recipients who suffered “extreme injuries” from the device’s failure, or endured long hospital stays after removal surgeries. Under the accord’s terms, 94 percent of eligible claimants must sign up for the settlement or J&J can withdraw from the deal, the people said.

The company and its DePuy unit face a total of about 12,000 suits filed in federal and state courts in Ohio, California, New Jersey and Illinois. Katz is coordinating federal litigation. The accord doesn’t bar patients whose hip implants fail in the future from seeking compensation, the people said.

The settlement covers the more than 7,500 patients who’ve already had surgery to have DePuy hips removed. The remaining claims were filed by patients who may be suffering pain from the hip implants, but haven’t yet had revision surgeries.

Lorie Gawreluk, a spokeswoman for DePuy, declined to comment.

Failure Rate

J&J recalled 93,000 ASR hip implants worldwide in August 2010, saying 12 percent failed within five years. Internal J&J documents show 37 percent of ASR hips failed after 4.6 years. Last year, the failure rate in Australia climbed to 44 percent within seven years.

J&J had touted the metal-on-metal implants, first sold in the U.S. in 2005, as a new design that would last 20 years and offer greater range of motion.

As failures mounted, patients complained in lawsuits that the metal-on-metal implant caused dislocations, pain and follow-up surgeries known as revisions. They claimed that debris from the chromium and cobalt device caused tissue death and increased metal ions in the bloodstream.

The consolidated federal case is In re DePuy Orthopedics Inc., ASR Hip Implant Products Liability Litigation, 10-MD-2197, U.S. District Court, Northern District of Ohio (Toledo).

To contact the reporters on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net; David Voreacos in federal court in Newark, New Jersey, at

dvoreacos@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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