Tuesday, November 26, 2013

$1.1 Billion May Be a Conservative Estimate for Stryker Hip Recall Settlements

Just nine months ago, Stryker Corp., the manufacturer of the recalled Rejuvenate and ABGII hip implant devices, estimated the costs associated with the recall would likely range between $190 and $390 million. Yet on October 28th, that estimate jumped to over $1.1 billion, not including the costs associated with patient revision surgeries, testing or additional treatment.  Hundreds of lawsuits have been filed in response to the July, 2012 recall, with hundreds more expected.

 

While exact figures are not available, it is estimated that as many as 20,000 recalled Rejuvenate and ABGII hip devices were implanted in patients between the time of FDA approval in 2009 and the time of the recall. Although Stryker claimed the two hip devices would last between 15 and 20 years—making them ideal for younger, more active patients—in fact adverse reports began coming in to the FDA within two years of approval.

 

Unlike other “true” all-metal hip implants—which have been subject to recalls and serious consumer health risks—the ABGII and Rejuvenate design replaced the cobalt and chromium ball with a ceramic ball, and the one piece neck and stem with a two-piece design. These design changes were believed to have produced a safer, longer-lasting hip device. Surgeons were able to choose from a variety of stem and neck components of different lengths and angles, allowing them to custom-fit the hip device to the individual patient’s body type and level of activity. Unfortunately, the neck-stem taper junction, designed to allow more freedom of movement for the patient, turned out to be a primary source of wear and corrosion.

 

In the recall notification, Stryker stated a higher-than-normal risk of fretting, corrosion, and the release of metal ion debris into the body. When taken together, these risks resulted in hip implants failing within 2-5years rather than the expected 15-20. Metal ions landing in hip tissue can cause inflammation, chronic pain, tissue degradation and bone loss, eventually leading to failure of the implant and the necessity of revision surgery. Those metal ions which make their way to the bloodstream can cause a variety of very serious health issues such as:

 

·         Neurological and cardiovascular disorders

·         Renal and thyroid problems

·         Diminishment or loss of hearing and vision

·         Irritability, anxiety, depression

·         Reproductive disorders

·         Gastrointestinal problems

·         Skin rashes

·         Vertigo

·         Short-term memory loss

·         Chronic headaches

·         Pseudo-tumor development

·         Disruption of DNA

 

Stryker reported second-quarter 2013 net earnings down 35%, and third-quarter earnings down 70%, due to the pending recall lawsuits. Mediation is underway for over 400 lawsuits consolidated in January in a New Jersey state court while hundreds more lawsuits have been centralized in the District of Minnesota. U.S. District Judge Donovan Frank will hear the Minnesota lawsuits with discovery sharing minimizing the time necessary to hear all the cases. It is expected that more lawsuits will be filed as victims of the Stryker recall become aware of the statute of limitations. Stryker Corp. acknowledges that latest estimate could increase, depending on the actual number of patients who end up seeking testing, treatment and revision surgery as well as the number of lawsuits ultimately filed. Both medical and legal assistance could be beneficial for those consumers who received a recalled Rejuvenate or ABGII hip implant.
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