Endo/American Medical System Sets Aside $520 Million for Mesh Litigation Costs

Jane Akre
February 26, 2014
AMS logo

Whether you settle a lawsuit or fight it to the bitter end, it costs a lot to be involved in transvaginal mesh litigation. Endo Health Solutions, the parent company of American Medical Systems (AMS) has set aside approximately $520 million to cover those costs according to its Securities and Exchange Commission filing (SEC) just released here.

Endo purchased American Medical Systems (AMS) in 2011 for $2.9 billion and in doing so inherited the company's product liability lawsuits.

AMS Apogee for POP

AMS Apogee for POP

According to the filing, AMS is facing 22,000 product liability cases involving its polypropylene mesh devices used to treat pelvic organ prolapse (POP) and stress urinary incontinence (SUI).

Of the 22,000, there are 16,317 lawsuits filed in federal court in the Southern District of West Virginia.

Endo/AMS makes the Apogee, Perigee and Elevate, among other mesh slings and pelvic organ repair mesh devices. The company says 850,000 units of the AMS sling have been sold worldwide, that include the Monarc Subfascial Hammock and the SPARC Self-Fixating Sling System.

The money set aside to cover whatever eventuality, comes from a pretax charge last year of $316 million, reports Fierce Medical Devices.

Despite a promise to "contest vigorously" all litigation, AMS last year agreed to pay $54.5 million to resolve an unnamed number of pending transvaginal mesh injury cases. See the background story here. See the SEC filing on the Master Settlement here.

According to the company’s SEC 8-k Filing:

“The Company believes that certain settlements and judgments as well as legal defense costs, relating to product liability matters are or may be covered in whole or in part under its product liability insurance policies with a limited number of insurance carriers.”

However in certain circumstances an insurance carrier may contest or deny coverage.

AMS/Endo is also facing a number of investigations by states Attorneys General which could result in penalties or fines if it is determine that the states paid for surgeries using a defective product.

The company is still required by the Food and Drug Administration (FDA) to conduct post-approval studies on women who have already received these mesh products. There were 19 AMS SUI and POP meshes that fell under the orders but for some reason, the FDA has agreed to put a hold on 16 of those studies, according to the filing.

That means three of the post-market inquiries are still alive and should be released next January.

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