Hip Replacement Uproar Only the Latest J&J Dispute
Even as an Indian government panel demands Johnson & Johnson pay US$28,000 to each patient harmed by its hip replacements, the US pharma giant continues to weather a worldwide storm of lawsuits costing it billions of dollars.
As Asia Sentinel reported on Aug. 30, while J&J issued a worldwide recall of its ASR hips in 2010 and settled thousands of lawsuits over the devices for more than US$4 billion in the US, it has paid only about US$2.25 million to Indian patients injured by the same devices. About 4,700 Indian patients received the faulty hip replacements.
“The fact remains that no compensation ever has been made by the firm in India to any patient,” according to a report issued on Aug 28 by an Indian government committee.
J&J No Stranger to Legal Battles
The company has a long record of fighting legal actions against its products. It has a willingness and the financial resources to continue a fight for years.
Johnson & Johnson is the world’s largest medical company. Its products have ranged from talcum baby powder to prescription drugs to complex medical devices. J&J reported US$76 billion in revenue for 2017. More than a third of that came from medical devices such as hip replacements.
J&J’s 2017 annual report also showed the company faced roughly 132,000 lawsuits over its products in U.S. courts by the end of the year. That same year, seven of the 10 largest jury verdicts against medical companies were against J&J. Verdicts totaled more than US$900 million.
But the court losses amount to a fraction of company revenues. And despite accusations of faulty products and massive jury awards, J&J’s revenue actually grew by more than 6 percent in 2017. Its annual report said the weight of pending lawsuits “is not expected to have a material adverse effect on the Company’s financial position.”
It also takes into account hundreds of millions of dollars in legal fees the company is willing to spend to fight actions against it.
Metallosis, Male Breasts
Johnson & Johnson has weathered thousands of lawsuits and billions of dollars in verdicts settlements in recent years. Lawsuits have claimed metal-on-metal hips caused a muscle-eating, metal poisoning called metallosis. Other lawsuits blame its mental health drug Risperdal for causing men to grow breasts. Still others accuse its talcum powder products of causing cancer.
J&J has long faced accusations that it was aware of risks many of its products posed even as it continued to market them.
The New York Times reported in 2013 that J&J was aware of problems with its ASR hips as early as 2005 but waited until 2010 to issue a global recall. J&J settled 9,000 ASR lawsuits in the U.S. for US$4.4 billion between 2013 and 2015. But 1,600 ASR lawsuits were still pending as of mid-August. The company also faces ASR lawsuits in the UK, Canada, Australia, Ireland, Germany and Italy.
J&J's Pinnacle Hips Under Fire
Attorneys have also accused J&J of hiding problems with its Pinnacle hip replacements for years. The accusations came to light during a series of high-profile trials in the U.S. Their evidence is credited with jury verdicts totaling more than US$1.7 billion in three trials. But J&J has managed to get the amount reduced in court to a little over half that.
The company continues to appeal the verdicts even as it faces more than 9,600 other Pinnacle hip lawsuits.
The Pinnacle lawsuits are part of a multidistrict litigation (MDL) in the U.S. MDLs allow federal courts to combine several similar lawsuits so they can move more quickly through the legal system. Despite this the Pinnacle MDL has been going on since May 2011.
The amounts juries have awarded in the Pinnacle trials are far higher than those in the ASR lawsuits. The ASR cases resulted in a single, US$8.3 million verdict before the company settled. The jury awards in the Pinnacle cases have ranged from US$245 million to just over US$1 billion. J&J has shown no signs of a willingness to settle the Pinnacle cases.
US$2.2B Fine by U.S. in 2013
In July, a judge upheld a US$4.6 billion verdict in a lawsuit by 22 women over J&J’s talcum powder products. They claimed they developed ovarian cancer after years of using baby powder and other J&J talc products which contained asbestos. The company already faces more than 8,600 ovarian cancer lawsuits over those products. The July verdict is expected to trigger even more lawsuits in the U.S.
Johnson & Johnson denies hiding problems from consumers. The company argues that their products are safe and have been used, in the case of talcum powder, for decades without adverse effects. But even the U.S. government has questioned J&J’s business practices.
In 2013, J&J agreed to the third largest pharmaceutical settlement ever with the US Department of Justice. The government accused the company of paying kickbacks to doctors and promoting unapproved uses for three of its prescription drugs. Johnson & Johnson agreed to pay US$2.2 billion.
“The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” then-U.S. Attorney General Eric Holder said at the time.
Fortune: J&J Most Admired Company
Despite these problems, Johnson & Johnson remains the largest medical company in the world based on revenue. That annual income may allow it to ride out what have become seemingly routine court verdicts or settlements in the billions of dollars. And despite court documents suggesting the company failed to act when it knew there were problems with its products, it ranks highly as an employer in the US. And Fortune magazine this year even named J&J a 2018 World’s Most Admired Company.
Terry Turner writes about policy and medical devices for Drugwatch, a US-based consumer website that highlights defective drugs and medical devices. He contributed this to Asia Sentinel.