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Stryker Taking $1 Billion-Plus Hit For Faulty Hip Implants

Stryker Taking $1 Billion-Plus Hit For Faulty Hip Implants
Stryker is taking a $1.425 billion charge to privately settle thousands of lawsuits related to its recalled Rejuvenate and ABG II hip implants.

The price for putting a faulty device out on the market is steep.

That is what orthopedics device company Stryker is realizing after agreeing to an out-of-court settlement related to its recalled Rejuvenate Modular-Neck and/or ABG II Modular-Neck Hip Stems.

The Kalamazoo, Michigan company announced Monday that it has settled a class action lawsuit involving New Jersey plaintiffs and a federal, multi-district liigation in Minnesota for which it is taking a cumulative charge of $1.43 billion.

Under the terms of the settlement, Stryker will provide a base payment of $300,000 to patients who were implanted with the Rejuvenate or ABG II hip systems and were forced to undergo revision surgery by November 3 to remove and replace the defective devices, according to a press release from a law firm representing some plaintiffs. 

Stryker may have to pay patients more than $300,000 if they suffered "extraordinary medical injuries, such as multiple surgeries (re-revisions) or infections and other medical complications" according to the law firm Lieff Cabraser Heimann & Bernstein.

Another law firm - Searcy Denney Scarola Barnhart & Shipley, P.A. - described the settlement as a landmark and unprecedented agreement for two reasons:

First, Stryker is required to pay current injuries and damages as well as pay for future complications that occur over the next two years as a result of the product, which was recalled in 2012. Second, unlike most comprehensive settlements, it is not a fixed-fund settlement. Every claimant's injury is measured individually, so there is not a single lump sum to be distributed to the claimants. There is no a cap on Stryker's liability under the settlement program.

To claim a payment, Patients have to first register with the designated claims processor at www.strykermodularhipsettlement.com by Dec. 14. They do not need to be represented by an attorney to submit a claim.

The settlement agreement covers1,800 cases consolidated before U.S. District Judge Donovan Frank in St. Paul, Minnesota and 2,100 lawsuits in New Jersey, according to Bloomberg.

However, it does not include patients still waiting for revision surgery as of Nov. 3 and are free to sue the firm for money. The Stryker press release also notes that the final amount that the company will pay to settle cases related to the two devices may be higher than $1.43 billion it has currently estimated.

In July 2012, Stryker recalled the two products citing "potential risks associated with fretting and corrosion at the modular neck junction," Patients complained not only of pain and swelling but metallosis (a systemic reaction to toxic metal ions shed from the hip), necrosis (tissue death), osteolysis (bone disintegration) and pseudotumor formation, according to a law firm's website. 

-- By Arundhati Parmar, Senior Editor, MD+DI
[email protected]

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