Stryker Corp. claims that a hip implant recall which began last June will cost from $190 million to $390 million for patient testing and treatment, new surgeries, lawsuits and insurance payments. The company said it increased the low end of its expectations for these costs and as a result also raised its related financial reserves. It will result in a fourth-quarter charge of 35 cents per share, or $174 million before taxes, according to Stryker.
Stryker, which also makes power tools, surgical accessories and hospital beds, recalled its Rejuvenate and ABG II modular-neck hip devices in June of 2012, saying there was a risk for corrosion, which may result in local tissue damage as well as pain and swelling. It provided the new cost information on January 8th with its financial outlook for the fourth quarter and full year. The company has hired third-party claims administrator Broadspire Services to help deal with patients who need to have their recalled hip implants replaced.
The eventual total cost of the recall will depend on several variables, Stryker said, including the number of patients who require testing and follow-up procedures and the cost of lawsuits. Stryker advised all patients who have the Rejuvenate Modular or ABG II modular-neck hip implants to consult a doctor. Stryker said on its website:
It is important that you follow-up with your surgeon, even if you are not experiencing symptoms such as pain and/or swelling at or around your hip.
The company said blood tests and imaging tests, such as X-ray, MRI or ultrasound, may be ordered to evaluate the device. Stryker’s recall last summer followed similar action from other orthopedic device manufacturers, including Johnson & Johnson, which initiated the biggest hip recall and also subsequently hired Broadspire to help manage patient care and limit its financial exposure. Hip implants made of all metal, known in the industry as metal-on-metal, have been especially problematic. In addition to high failure rates and other pitfalls, they may release metals into the bloodstream over time. It is unclear what the long-term consequences of high levels of metal in the blood may be. Dr. Mary O’Connor, an orthopedic surgeon at the Mayo Clinic in Jacksonville, Fla., observed:
The issue of greatest concern is the potential for elevated metal ions in the bloodstream and the damage that can be caused to the muscles, tendons, soft tissue and bone. Soft tissue damage is more critical than bone damage. If the bone is damaged, we can do something. But if the muscle is dead because it has been poisoned by metal ions, we can’t recreate it.
Dr. O’Conner believes that it’s too early to say whether the problems will be as great as those suffered by patients who got the ASR hip implant made by J&J. She says that “it’s the same basic problem of metal ions poisoning the tissues.” As I have written on numerous occasions, our firm is heavily involved in the “hip implant” litigation. If you need more information on any aspect of this litigation, including cases against Stryker, contact Navan Ward at 800-898-2034 or by email at Navan.Ward@beasleyallen.com.
Source: Claims Journal
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