DePuy Hip Recall- On Track to be Most Costly Since 2007

It has been roughly a year since DePuy Orthopedics, a
subsidiary of Johnson and Johnson, recalled their DePuy ASR and ASR XL hip
systems. According to a Bloomberg News publication
back in March 2011, a January 25 earnings statement showed that DePuy had taken
a $280 million charge in the fourth quarter to pay for the recall.

Image from Reuters

Michael Mahoney, Johnson & Johnson’s worldwide chairman
for medical devices, assured investors at a March 2011 conference “We are
setting the right high bar for the industry in how we’re managing the recall.
But it is something that we’re continuing to work through. We’ll see the impact
of the ASR diminish throughout, as we move forward in 2011.”

Perhaps he was being a bit optimistic. Later in March, the
British Orthopaedic Association and the British Hip Society came out with data
that showed the ASR system’s failure rate was nearly four times the rate cited
by DePuy when it recalled the device.

Mass Device is now saying that the device is on track to be the biggest and most expensive device
recall since Medtronic recalled its Sprint Fidelis lead in 2007. The overall
cost could be in the billions. Interestingly, since January of this year, the
FDA has received more complaints about metal-on-metal hip implants than in the
past four years combined.

As expressed in a recent Reuters
article, legal experts continue to scrutinize DePuy for outsourcing their
crisis control to Broadspire, pointing out that it is a way for DePuy to limit
payments while gaining control of material that could be used to their
advantage in court.