DePuy Hip Recall Leads J&J to Write Off $922 Million, But Future Costs Expected To Grow Exponentially
When the DePuy hip implants were recalled by Johnson & Johnson on August 26, 2010, confirming that they have excessively high failure rates, DePuy hip sufferers rightly felt a sense of vindication. The DePuy hip recall was a clear statement that DePuy Orthopaedics, a division of Johnson & Johnson, was acknowledging problems with the DePuy hip implants.
Now, Johnson & Johnson has recognized that the DePuy hip recall is going to be costly for it. Very costly.
In financial statements that Johnson & Johnson has just made public, the company has reduced its net earnings for the fourth quarter of 2010 by $922 million. Johnson & Johnson said that it was taking that write-off to account for “the net impact of litigation settlements, product liability expense and costs associated with” the DePuy hip recall.
DePuy Hip Recall Costs
Most estimates suggest that about 38,000 people in the United States have been implanted with the DePuy hip (and that a total of 93,000 people around the world have the DePuy hip implant). Based on the twelve to thirteen percent five-year “failure rate” previously acknowledged by DePuy – a rate that may very well turn out to be higher, and perhaps significantly higher, as more people with the DePuy hip implant learn of the problems – one can reasonably expect that the $922 million write-off just announced by Johnson & Johnson will be but a small portion of the amount the DePuy hip recall ultimately will cost the mega-company.
It most definitely appears that Johnson & Johnson will be able to bear the costs that it will have to pay to people who are suffering with DePuy hip implants and who need revision surgery (the implantation of another hip to replace the DePuy hip implant), other medical procedures, tests, care, and compensation for their pain and suffering and other losses.
Johnson & Johnson, after all, is an international giant. The company’s financial statements tell the story: The $922 million write-off for the DePuy hip recall is but a small portion of the $24.6 billion worth of medical devices and diagnostics it sold in 2010. In fact, the company’s total worldwide sales for the year were more than $61.5 billion.
Importantly, the $922 million that Johnson & Johnson is writing-off for the DePuy hip recall in the fourth quarter of 2010 does not at all cap, limit, or set the damages that will be payable to any person suffering with a DePuy hip implant. The amount that DePuy hip implant sufferers may receive from the company will be determined in the context of settlement negotiations or court proceedings.
William C. Weldon, the chairman and chief executive officer of Johnson & Johnson, stated that “2010 was a challenging year” in a press release issued by the company when it released its fourth quarter financial statements and announced its decision to write-off $922 million for the DePuy hip recall. Mr. Weldon undoubtedly had in mind Johnson & Johnson, and the DePuy hip recall. But the people who have the DePuy hip implant and who are suffering with pain and worry know that, most of all, 2010 was a challenging year for them.
DePuy Hip Recall Lawsuit
If you have or a loved one has experienced any problems as a result of a DePuy hip implant, you may be able to file a lawsuit seeking compensation for your medical expenses, pain and suffering, lost wages and more. Contact one of our lawyers today for a free and confidential DePuy hip recall lawsuit evaluation.