How Much Will DePuy Hip Recall Cost Johnson & Johnson?

New York, NYThe DePuy Hip recall has already cost Johnson & Johnson in terms of lost profit and costs associated with the DePuy Hip Replacement recall. How much the DePuy hip replacement recall will cost Johnson & Johnson when it comes to litigation costs remains to be seen. The company's fourth-quarter report, however, sheds some insight into what the company expects when it comes to losses associated with the DePuy lawsuits.

According to the company's fourth-quarter report, Johnson & Johnson, parent company to DePuy, took an after-tax charge of $922 million. That charge is for potential litigation settlements, a recall of the DePuy hip implants, an increase of the company's liability reserve and other costs linked to the DePuy hip recall.

Overall, the company's fourth-quarter profit was down 12 percent from the previous year, according to The Wall Street Journal (01/25/11).

Meanwhile, plaintiffs continue to join lawsuits against DePuy Orthopaedics, alleging the DePuy hip replacement devices have failed at an alarming rate. Approximately 12 people from Tennessee have joined a lawsuit against DePuy, according to The Tennessean (01/15/11). The article notes that approximately 13,000 people worldwide are currently involved in litigation against the prosthetic-maker.

Lawsuits allege that the metal-on-metal device causes metallic debris to come loose and be absorbed by the tissue, resulting in a condition known as metallosis. They further allege that one in eight patients who received a DePuy hip replacement required revision surgery within five years. Revision surgery is a complicated procedure that carries its own risks and requires lengthy recovery times.

Most patients who receive a hip replacement device expect the device will last approximately 15 to 20 years.

Plaintiffs further allege that DePuy received complaints about its hip replacements in 2007 but waited until 2010 to issue a recall. Although Johnson & Johnson has set aside $922 million reportedly for litigation related to its DePuy hip replacement devices, it is possible that the company will pay out more than that by the time litigation is complete.

Currently, it is believed that between 12 and 13 percent of the DePuy hip replacements fail within five years, but that percentage could go higher as more people become aware of the situation and experience failure in their own hip replacement devices.

Approximately 90,000 DePuy ASR XL Acetabular Systems and DePuy ASR Hip Resurfacing Systems were affected by the recall, which was announced in August 2010.