Stryker to pay $1.4 bn to settle faulty hip implants lawsuits

US medical equipment maker Stryker Corp yesterday reached an agreement to pay at least $1.43 billion to settle thousands of lawsuits from patients who had undergo surgery to correct faulty hip implants.

Under the settlement covering 2,375 patients in 39 states, Stryker will pay a minimum of $300,000 to each patient who had to undergo corrective surgery to replace either of Stryker's Rejuvenate Modular-Neck hip stem and/or ABG II Modular-Neck hip stem.

Stryker and its hip-implant subsidiary Howmedica Osteonics, were forced to recall these two models from the global market in 2012 after patients complained of pain and swelling due to fretting and corrosion of the metal-on-metal hip implants.

Following complaints by patients, Stryker voluntarily issued a global recall of these two products in July 2012.

Stryker and Howmedica sold more than 20,000 of these two models in the US before they were recalled. Although these hip implants were expected to last 15 to 20 years, they were removed from the market only two years after they were introduced.

The recall came two years after its arch rival Johnson and Johnson's unit DePuy Orthopaedics recalled 37,000 hip implants in the US and the remaining worldwide after finding that more people than expected who underwent hip replacement surgeries experienced pain and other symptoms that led to a second hip replacement surgery.

Following a settlement, DePuy Orthopaedics paid around $3 billion to about 8,000 patients whose hip implants were found defective.

''This settlement program provides patients compensation in a fair, timely and efficient manner,'' Bill Huffnagle, president of Stryker Orthopaedics' reconstructive division, said in a statement.

The settlement applies to patients who have undergone a revision surgery as of 3 November 2014, while those who have not yet undergone a revision may still be eligible to file a lawsuit.

Founded by Dr. Homer Stryker as the Orthopedic Frame company in 1946, Stryker is one of the world's leading medical technology companies offering a diverse array of innovative medical technologies including reconstructive implants, medical and surgical equipment, and neurotechnology and spine products.

Stryker, based in Michigan, competes with DePuy Orthopaedics, Zimmer Holdings, Medtronic, Synthes, Smith & Nephew, and Biomet, and holds a 16-per cent share in the global orthopaedic market.

The company sells its products through local dealers and direct sales force to doctors, hospitals, and other healthcare facilities, as well as through third-party dealers and distributors primarily in the US, Ireland, Germany, France, Switzerland, the UK, Japan, Canada, the Pacific region, and Latin America.

Stryker posted net profit of $1 billion in 2013 on revenues of $9 billion, and has a market cap of $33.2 billion.