Breaking News! Endo Settles Some AMS Vaginal Mesh Cases for $55 Million

Jane Akre
June 21, 2013
Apogee for POP, AMS

Apogee for POP, AMS

June 21, 2013 ~ Endo Health Solutions Inc. unit has agreed to pay $54.5 million to settle some product liability lawsuits filed by women who were implanted with the Perigee, Apogee and Elevate transvaginal mesh.

The women claim they were injured by the polypropylene mesh implants and call the transvaginal mesh a defective product. The settlement, revealed in a securities filing Thursday, does not say how many lawsuits will be resolved, reports Bloomberg News (here).

Those cases settled are being handled by David Matthews, a Houston-based attorney (here) who had filed the cases in both state and federal court.

Endo Health purchased American Medical Systems (AMS) in 2011 for $2.9 billion and with it some of its debt, including the pending product liability lawsuits. AMS plans to “vigorously defend themselves in the remaining mesh product liability cases and in any new cases that may arise,” according to company officials in a statement filed with the Securities and Exchange Commission.

As of June 12, AMS was facing 7,385 lawsuits that had been consolidated in the West Virginia multidistrict litigation. Here is the MDND back story:

Endo, based in Chadds Ford, Pa, is one of six companies facing about 29,000 lawsuits calling the commonly implanted polypropylene mesh a defective product.

MDND reported on the Marion Carpenter case naming American Medical Systems which was was delayed until early next year. See back story here.

In April 2012, American Medical Systems Inc. filed its Position Statement with the federal court in West Virginia laying out its defense strategy in facing the POP and SUI cases. At that time there were 318 cases filed against AMS.

Last June C.R. Bard lost a product liability lawsuit in California over its Avaulta mesh and was ordered to pay $3.6 million to Christine Scott and her husband. In that case, her doctor was also sued and ordered to pay $1.5 million. Bard is appealing the award.

In February, Ethicon, a division of Johnson & Johnson, lost a product liability lawsuit filed in New Jersey wnd was ordered to pay $11.1 million in including $3,35 million in punitive damages to a South Dakota woman implanted with the Prolift prolapsed mesh. (here) has the entire filing statement:

"As previously reported, since 2008, our wholly-owned subsidiary American Medical Systems, Inc. ("AMS"), and more recently, in certain cases the Registrant or certain of its subsidiaries, have been named as defendants in multiple lawsuits in various federal and state courts, as well as in Canada, alleging personal injury resulting from the use of transvaginal surgical mesh products designed to treat pelvic organ prolapse and stress urinary incontinence. See “Legal Proceedings” in Note 12 of Notes to Condensed Consolidated Financial Statements in the Company's Report on Form 10-Q for the quarter ended March 31, 2013.

"On June 14, 2013, AMS and certain plaintiffs' counsel representing mesh-related product liability claimants entered into a definitive Master Settlement Agreement (the "Agreement") regarding a set inventory of filed and unfiled mesh cases handled or controlled by the participating counsel. The Agreement was entered into solely by way of compromise and settlement and is not in any way an admission of liability or fault by the Company or AMS. The Company and AMS intend to continue to vigorously defend themselves in the remaining mesh product liability cases and in any new cases that may arise.

"Under the terms of the Agreement, AMS will pay $54.5 million into a settlement fund held in escrow by a mutually agreed upon escrow agent, on or before July 15, 2013. The Agreement establishes a claims administration process that includes guidelines and procedures for administering the settlement. The Agreement and the distribution of funds to participating claimants are conditioned upon, among other things, AMS obtaining full releases from no fewer than 95% of the claimants covered by the Agreement within 120 days of the Agreement's execution. If the above-noted 95% plaintiff participation threshold is not reached by October 12, 2013, AMS may terminate the settlement program and have the escrowed $54.5 million repaid to it.

"Distribution of funds to any individual is conditioned upon a full release and a dismissal with prejudice of the entire action or claim as to all AMS parties and affiliates. Prior to receiving an award, an individual claimant shall represent and warrant that liens, assignment rights, or other claims that are identified in the claims administration process have been or will be satisfied by the individual claimant. The amount of settlement awards to participating claimants, the claims evaluation process and procedures used in conjunction with award distributions, and the negotiations leading to the settlement shall be kept confidential by all parties and their counsel."

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