Stryker Hip Settlements and Recall Costs Could Top $1 Billion

Between $700 million and $1.13 billion is the latest estimate by Stryker Corporation, the manufacturer of recalled hip replacement systems, due to the costs related the recall, lawsuits and Stryker hip settlements.

In its 2013 third-quarter earnings reports and form 10-Q report, Stryker announced that estimate before third-party insurance recoveries.

Stryker hip settlement estimated costs

“The ultimate total cost with respect to this matter will depend on many factors that are difficult to predict with limited information received to date and may vary materially based on the number of and actual costs of patients seeking testing and treatment services, the number of an actual costs of patients requiring revision surgeries, the number of and actual costs to settle lawsuits filed against us, and the amount of third-party insurance recoveries,” the company stated in the 10-Q report to the U.S. Securities and Exchange Commission.

Quarterly net profits fell 70% mainly due to the fact charges for its ABG II and Stryker Rejuvenate recall blunted increased revenues from sales of other products, according to the reports.

Hip replacement complications result in recall and lawsuits

Patients have filed  lawsuits over the Rejuvenate and ABG II modular hip implants, designed and distributed by Stryker Orthopedics, due to side effects from the implants, including:

• Metallosis caused by fretting and corrosion at the modular neck junction,
• Pain,
• Inflammation,
• Infection,
• Pseudotumors,
• Tissue damage and death,
• Bone loss,
• Premature loosening, and
• Early implant failure requiring revision surgery

Plaintiffs claim the company failed to warn them about these hip replacement complications and failed to conduct adequate safety studies before launching the products on the market.

Citing the potential for fretting and corrosion, the company issued ABG II and Stryker Rejuvenate recall in July 2012. Over 50 cases have been centralized in multi-county litigation (MCL) in New Jersey Superior Court. An MCL functions in much the same way as multidistrict litigation, but handles claims on a state level.

Hip replacement design could result in blood poisoning

Approved in 2008 and 2009, the Stryker Rejuvenate and ABG II systems were initially marketed as being of advanced technological innovation, offering surgeons more options than ever in fitting patients of different anatomies. Unlike most designs, which included a one-piece stem, these new implants had a “modular-neck” design with two-part hip stems. The surgeon inserts the neck into the stem, and has a range of options to choose from when fitting an individual patient, depending on age, height, body-type, and mobility.

These two Stryker hip replacement systems were initially designed to avoid the issue of metal contamination seen with other systems made of metal alloys, since they included ceramic cups and metal sockets. Yet both components in the two-part stem were made of metal.

Post-marketing reports indicated that these stem components could rub together, shedding metallic debris into the surrounding joint area and bloodstream. Within a couple years, the FDA had received as many as 60 adverse event reports related to the systems.

Stryker has also had legal issues due to earlier hip replacement products. Following the 2008 recall of the Trident Acetabular Cup System and Hemispherical Cup Systems – both ceramic-on-ceramic devices – some recipients of the implants came forward seeking compensation for their injuries.

If Stryker hip settlements are reached with litigants who filed lawsuits over Rejuvenate injuries, the company could avoid costly jury verdicts.