July 2 (Bloomberg) -- Johnson & Johnson will pay Oregon $4 million to resolve deceptive marketing claims over recalled metal-on-metal hip implants in its first accord with any governmental unit involving the devices.
While the sum is dwarfed by J&J’s earlier settlement of patient lawsuits linked to the ASR hip, the agreement may lead the way for additional accords as federal and multi-state probes continue into the company’s sales of the device.
“Oregonians in need of a hip replacement deserve to know that the artificial hip they are contemplating in fact has the qualities, and benefits, that a company advertises,” Oregon Attorney General Ellen Rosenblum said in a statement. “Doctors also need to know that the products they suggest to their patients meet certain standards.”
Oregon is at the forefront of the investigations, Rosenblum said. A group of state attorneys general is investigating how the hips were marketed, while the U.S. Justice Department and the U.S. Attorney’s Office in Massachusetts are probing whether the company made false claims or false statements about the devices to federal health care programs, J&J said in a May regulatory filing.
Oregon began looking at the implants in 2011 and opened an investigation about a year before a multi-state probe began, state Assistant Attorney General David Hart said in a phone interview. J&J’s DePuy, the maker of the devices, began settlement discussions with state officials after they prepared a civil complaint, he said. DePuy sold 432 metal-on-metal, chromium and cobalt hip devices in Oregon from 2005 to 2010, according to Rosenblum.
The payment to the state resolves claims that the company violated Oregon’s unfair business practices law by telling patients and doctors that the hips functioned properly when evidence showed they were failing at unusually high rates.
“If other government entities obtained similar payments from DePuy based on the number of devices sold, it would be a very large number and significant deterrent,” Hart said. He declined to comment on the multi-state probe.
DePuy didn’t admit wrongdoing under the agreement, Mindy Tinsley, a DePuy spokeswoman, said in an e-mail, declining to comment on the probes.
J&J has voluntarily turned over documents responding to “informal” U.S. requests for information related to the hip device and is fully cooperating with the government’s civil investigation, the company said in the May regulatory filing.
The company last year said it would pay at least $2.47 billion to resolve thousands of lawsuits over the implants. The agreement resolved about 8,000 U.S. suits against DePuy brought by patients who have already had artificial hips removed.
The New Brunswick, New Jersey-based company recalled 93,000 ASR hip implants worldwide in August 2010, saying 12 percent failed within five 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 implants 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.
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