Johnson & Johnson Takes $3 Billion Dollar Fourth Quarter Charge

Introduction

Johnson & Johnson, the parent company of DePuy Orthopedics recently took a fourth quarter charge of over $3 billion dollars related primarily to their voluntary recall artificial hip implants—the DePuy ASR Acetabular System and the ASR Hip Resurfacing System. The recall took place in August of 2010, after the FDA had received incident reports regarding the DePuy metal-on-metal hip implants for over two years. Approximately one in eight patients—and possibly more—will require a hip revision surgery to remove the faulty DePuy device and replace it with another hip implant device. Unfortunately, most patients have a longer recovery time and more medical issues related to the second revision surgery than they did with the first.

The DePuy recalled devices implement a specific metal-on-metal hip replacement construction which has been shown to shed metal fragments into the bloodstream and surrounding tissues, causing potentially disabling injuries. These metal fragments can lead to cobalt and chromium toxicity or poisoning. Chromium poisoning symptoms are much the same as those of cobalt poisoning, including brain damage, irregularities of the heart, and even seizures. Cobalt poisoning may even be a contributor to cancer and any form of heavy metal toxicity is not to be taken lightly.

The $3 billion dollars will be set aside for the patients who were harmed by the DePuy devices as well as their attorneys who are involved in this growing product liability litigation. Wall Street’s forecasted stock earnings for the DePuy Company had been estimated to be around $5.21 per share however DePuy’s own company forecast estimates $5.05 to $5.15 per share. Even so, Johnson & Johnson reported better than hoped for fourth-quarter earnings due in part to favorable taxes and the sale of some new prescription drugs. Johnson & Johnson’s global sales for the last quarter of 2011 was a staggering $16.26 billion dollars, making it difficult for those injured by the hip recall device to feel much sympathy for the pharmaceutical giant

Recall of Artificial Hip Causes Johnson & Johnson 2012 Earnings Forecast to Dip

 Recall of Artificial Hip Causes Johnson & Johnson 2012 Earnings Forecast to Dip

Introduction

The pharmaceutical giant, Johnson & Johnson, has been given a 2012 earnings forecast which is below the previous estimates present by financial analysts due to the number of DePuy hip replacements which were recalled. In fact, recent reports state Johnson & Johnson takes $3 billion charge for hip recall. In 2010 it was discovered that the DePuy metal-on-metal hip replacement devices were shedding metal fragments and Johnson & Johnson issued a recall for those particular hip replacements. The metal fragments which were shed into the body were found to cause disabling injuries in some recipients, and the toxicity from the chromium and cobalt debris can cause the surrounding tissues to suffer necrosis or death.

Things You Should Know About Johnson & Johnson’s and DePuy Orthopedics’ Attempts to Help Hip Implant Recipients

Things You Should Know About Johnson & Johnson’s and DePuy Orthopedics’ Attempts to Help Hip Implant Recipients

Introduction

DePuy hip implants were used widely throughout the world, beginning in 2003, and in the United States from 2005. Although concerns were raised regarding the safety of these hip implant devices, a recall by DePuy was not issued until August of 2010 when DePuy received data from the National Joint Registry showing the five year revision rate for the ASR hip replacement system was approximately 12-13%. This study appeared to show that the risks for revision surgery were highest among female patients who received the smaller ASR heads which were less than 50mm in diameter. The recall in 2010 was voluntary on the part of DePuy and Johnson and Johnson and the pharmaceutical giant has subsequently issued several field safety notices to physicians to enable them to help their patients whose health has been affected by the DePuy hip implant failure.

New Updates for DePuy Hip Implant Victims

The DePuy ASR Litigation Status Conference

On January 23, 2012, the DePuy ASR Litigation Status Conference in West Palm Beach, Florida was held before Judge David Katz. Judge Katz is the United States Federal District Judge assigned by the Multi District Litigation panel of judges to hear all pretrial matters in any DePuy ASR cases filed in federal court.

Judge Katz met with the Executive Committee of the Plaintiffs’ Steering Committee for about an hour privately before he met with all attorneys in open court. The Plaintiffs’ Steering Committee are the dozen or so lawyers Judge Katz assigned as leaders of all plaintiffs’ lawyers who have filed cases in the ASR litigation. The Plaintiffs’ Steering Committee is responsible for gathering evidence (Johnson and Johnson and others have turned over approximately 18,000,000 documents so far), taking depositions of fact and expert witnesses, legal analysis, submitting briefs to the court, and a variety of other tasks.

Johnson Takes $3 Billion Hit on Hip Recall

Johnson & Johnson took quarterly charges of more than $3 billion, largely related to the recall of artificial hips, and gave a 2012 earnings forecast below analysts’ estimates on Tuesday.

The company’s DePuy Orthopedics unit issued an extensive recall of its “metal-on-metal” hip replacement devices in 2010 after they shed metal fragments, causing disabling injuries.

The fourth-quarter charges will allow money to be set aside for patients and lawyers involved in product liability litigation.

“The hip recalls worry me because their eventual costs are unknown,” said Jeff Jonas, an analyst at Gabelli & Company, who noted that the fourth-quarter charges included $800 million for medical costs of the recall.

The company forecast 2012 earnings of $5.05 to $5.15 a share, compared with the consensus Wall Street view of $5.21.

William Price, a company spokesman, said most analysts had not factored in damage from the stronger dollar.

Johnson & Johnson reported better-than-expected fourth-quarter earnings, helped by favorable taxes and sales of new prescription drugs. The company earned $218 million, or 8 cents a share, in the quarter. That compares with $1.9 billion, or 70 cents a share, a year earlier, when it also took charges for recalls of hip replacement devices.

Excluding special charges, Johnson & Johnson earned $1.13 a share. Analysts had expected $1.09, Thomson Reuters said.

Johnson & Johnson, which is based in New Brunswick, N.J., said global sales rose 3.9 percent in the quarter, to $16.26 billion, slightly below analysts’ target.

News source : www.nytimes.com

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Hip Replacement Implant Complaints on the Rise

Hip Replacement Implant Complaints on the Rise
By Holly Soehnge

Hip replacement is a common orthopedic surgical procedure performed to relieve pain and restore mobility to a damaged hip joint, typically for patients with arthritis or a hip injury. Diseased or damaged portions of the hip ball and socket joint are replaced by prostheses made of metal, ceramic, plastic, or combinations of these materials. Metal-on-metal (MoM) hip replacement implants use ball and socket components that are both made of cobalt or chromium metal, or titanium. The ball fits into and glides against the surface of the socket to imitate the function of the hip joint.

Hip replacement surgery is mostly successful, and hip implants are made to last 15 or more years before replacement is required. There are risks of several complications that can occur, however; as with any type of surgery. Complications that can occur include infection, dislocation of the ball implant from the socket, and implant loosening or other wear and tear over time requiring another hip replacement surgery.

In contrast to the pain relief and durability characteristic of hip replacement treatments, recently there has been a remarkable surge in complaints of early failures of metal-on-metal hip replacements within a few years of surgery. Some patients have experienced severe ongoing pain, swelling, and difficulty walking. Others have suffered damage or death to the soft tissue surrounding the hip joint. Many of these implant failures require the patient to undergo painful and expensive revision surgery.

Metal-on-metal hip implants wear over time, resulting in deposits of metal debris in the tissues surrounding the hip joint. A chiseling effect known as edge-loading can occur when the ball of the implant presses on the socket edge as a result of poor implant design or faulty surgical technique. Large amounts of metal debris are deposited in the tissues as a result, which can lead to high levels of cobalt and chromium ions in the patient’s bloodstream, possibly leading to metal poisoning. Studies to date have not shown a greater risk of cancer or other adverse effects from the metal ions, although additional data from ongoing studies is needed before the long-term effects are known.

Current research estimates that 1 to 3 percent of patients could experience an inflammatory reaction to the metal debris, causing chronic pain, damage and death to hip tissues, and bone loss. Women appear to be affected more frequently than men. A recent Harvard Medical School study looked at the effects of edge-loading from metal hip implants. The research showed an association between resulting high cobalt and chromium blood levels and patient susceptibility to soft tissue pseudotumors. Pseudotumors are a rare complication, but nevertheless a very serious problem, causing tissue destruction and the need for revision surgery. Metal debris complications are a significant safety concern and the focus of ongoing studies.

Concerned for their patients’ safety, most orthopedic surgeons have stopped using metal-on-metal hip implants. Metal-on-metal hip implants were used in about one third of the 250,000 hip replacements performed in the United States until the past two years, when use of the implants has dropped to only about 5 percent of the market.

The Food and Drug Administration (FDA) has received over 5,000 reports of adverse events in connection with metal-on-metal hip implants since January 2011, according to a study by the New York Times. In response to the complaints, the FDA is encouraging patients who have received metal-on-metal hip replacements to contact their surgeons immediately if they experience problems, and to participate in safety surveillance studies.

The FDA has required 21 manufacturers of metal-on-metal hip implants to submit plans to conduct post-marketing surveillance studies to address safety issues related to the implants. Among these manufacturers are DePuy, a division of Johnson & Johnson, Zimmer Holdings, Wright Medical, and Biomet. The FDA has until November 2011 to decide whether the proposed plans are adequate to address safety concerns.

Of the metal-on-metal complaints received by the FDA this year, about 75 percent relate to complications with the DePuy ASR hip replacement systems. Depuy has attributed the failure of the devices to implant loosening, infection, bone fracture, dislocation, metal debris reactions, and accompanying pain. Some orthopedic surgery experts have said they believe these devices have a design flaw that makes them difficult to implant properly. DePuy refuted these statements, but announced last year that it was discontinuing the ASR systems because of declining demand.

In August 2010, Depuy voluntarily recalled its two ASR systems as a result of new data from the National Joint Registry of England and Wales showing that roughly 1 in 8 ASR patients would experience implant failure within 5 years, an unacceptably high failure rate. There have been over 90,000 DePuy metal hip implants sold; so that according to the data, over 11,000 patients are likely to experience implant failures that require painful and expensive revision surgery.

The two DePuy systems under recall are the ASR XL Acetabular System, a metal cup and ball replacing the hip joint, and the ASR Hip Resurfacing System, a metal cap that fastens onto the head of the femur. Only the ASR XL Acetabular System is FDA-approved for use in the US. Depuy has encouraged surgeons having implanted these devices to request patient evaluations and metal sensitivity testing, since not all patients with metal debris-related tissue damage would necessarily show symptoms. Depuy has stated that it will cover the costs of patient monitoring and treatment, including revision surgery costs.

DePuy is facing criticism from orthopedic experts that it should have recalled the devices much sooner considering the large number of complaints. The first of many lawsuits filed against DePuy claims the devices are defective and alleges that DePuy knew about problems with the implants early on, but did nothing to alert patients or surgeons.

Metal hip implants made by Zimmer Holdings branded “Durom” are also coming under increased scrutiny for potentially causing high blood levels of chromium and cobalt and soft tissue damage from metal debris. Studies at the University of British Columbia found that patients implanted with a Durom socket implant had 2.6 times or 10 times higher than normal blood levels of chromium and cobalt, respectively. The researchers recommended that Durom implants no longer be used in standard implants because of the metal ion levels.

The rise in the incidence of severe medical complications from metal-on-metal hip implants is a rapidly growing concern for patients and orthopedic surgeons. It is difficult to know the full extent of the problem; the use of the latest metal-on-metal devices is still relatively new, and it is estimated that only one to ten percent of all complications from medical devices are actually reported to the FDA. More information is needed from ongoing studies to determine to what extent metal debris represents a threat to patient health, and whether implants made by some manufacturers are more or less safe than others.

What Does the U.S. Food and Drug Administration’s Letter to Hip Makers Mean?

The U.S. FDA ordered 21 manufacturers to collect information from patients.

The U.S. FDA ordered 21 manufacturers to collect information from patients in a recent letter to hip manufacturers. Click here for report. The three-page letter demands blood tests and other studies within thirty days. Here is a summary of the information and questions the FDA is requiring from manufacturers:

• The harmful events observed in patients with Metal-on-Metal (MoM) total hip replacement (THR) systems.
• The levels of serum and chromium in patients prior to THR.
• The patient population's average levels of chromium and serum in the blood for a minimum of eight years after the implant (patient population is the demographics and other particulars of a particular population).
• Do the average levels of chromium and serum in the blood increase during the first eight years (or the length of time on the market)?
• Reasons for revision (alteration of a medical device) and patient population's average levels of chromium and serum in the blood at the time of the revision.
• The number of patients with pain and biological and psychological symptoms associated with the THR.
• The quantity of harmful reaction of body tissues in patients who did not have a revision.
• How differences in revisions vary over time after the initial implant?
• What demographics have higher metal ion concentrations in their blood?
• What demographics have higher risks of needing revisions?
• What causes the THRs to fail?