J&J Facing Surging Litigation Costs
Mesh Medical Device News Desk, March 13, 2017 ~ Johnson & Johnson (J&J) is facing at least 17 different lawsuits in the coming year.
And 2017 promises to be even worse for litigation and the cost of legal services with an increasing number of people suing the healthcare giant.
J&J lost six of seven verdicts in 2016.
The number of lawsuits jumped to 104,700, according to a recent securities report filed February 27, 2017. That’s up from 28,300 in 2016. Litigation expenses increased to $817 million.
There are five major areas of litigation.
Risperdal – Men claim they grew breasts after taking the antipsychotic medicine Risperdal. So far, 18,500 lawsuits have been filed. J&J lost a trial last year in Philadelphia where the jury awarded $70 million to a family of a boy who grew breasts beginning at age five. Another man was awarded $2.5 million by an Alabama jury in 2015. He developed size 46DD breasts.
The company failed to disclose evidence the drug could elevate levels of the hormone prolactin when prescribed to boys. Litigation shows Risperdal was marketed for uses not approved by the FDA, such as children with autism and attention deficit hyperactivity disorder.
The cases are on appeal.
“Contrary to the impression the plaintiff’s attorneys have attempted to create over the course of this litigation, Risperdal is an important FDA-approved medicine. We will continue to defend this litigation and will try cases where appropriate.”~ J&J SEC Report
Xarelto – There are 17,000 lawsuits pending over the drug Xarelto, a blood thinner that can lead to uncontrolled bleeding. The first MDL trial is set for April 24, 2017 in the Eastern District of Louisiana.
Pelvic Mesh – More than 54,800 women are suing over the company’s transvaginal meshes, the SEC filing reports. Outside of multidistrict litigation in Charleston, WV there are cases in state court in Bergen Co., New Jersey and the Court of Common Pleas in Philadelphia, as well as various state court actions.
Claims have also been filed in the United Kingdom, the Netherlands, Belgium, Italy and Venezuela. Class actions are underway in Israel, Australia and Canada.
An accrual is an estimate of legal defense costs needed.
“The company has established an accrual with respect to product liability litigation associated with Ethicon’s pelvic mesh products. Changes to this accrual may be required in the future as additional information becomes available.” ~J&J’s SEC Report.
DePuy ASR XL Acetabular System and Hip Resurfacing System is facing 2,000 plaintiffs as of January 1, 2017, and 9,400 with the Pinnacle Acetabular Cup System.
Talcum Powder – Talc and its link to ovarian cancer has more than 3,000 women filing lawsuits against J&J over its Baby Powder and Shower-to-Shower. Cases so far are filed in Missouri, New Jersey and California and plaintiff jury awards of $70 million and $55 million. J&J just won its first case in a St. Louis court recently.
The company announced it was restricting its Medical Devices segment to save pre-tax $800 million to $1 billion.
The company says its financial bottom line won’t be impacted by these legal proceedings but warns resolving lawsuits may have a “material adverse effect” on its earnings at some future date.
The SEC report says that medical device segment sales in 2016 were down 0.1% from 2015.
“The operational decline in General Surgery was due to lower sales of women’s health and urology products and pricing pressures partially offset by growth of sutures.”
In 2016 the Medical Devices segment income before tax as a percentage to sales was 22.2% versus 27.2% in 2015.
J&J EXPANSION, CONTRACTION
In recent months, J&J announced it would open a new office in Ghana in West Africa.
Without any specifics the focus will continue to, “lead the expansion of our product portfolio and continue to address many of the most prominent health issues impacting patients and health care providers here.” Specifics include mental health, diabetes, maternal, newborn and child health, HIV prevention and oncology.
Meanwhile the company is closing a surgical suture factory in Scotland also losing 400 jobs. The move is said to be part of the company’s global restructuring designed to streamline operations. The plant, located in Livingston, Scotland, produces 5-6% of J&J’s global output of surgical sutures.
The manufacturing operation may move to Texas, Brazil and Mexico.
On February 21, 2017, Judge Joseph Goodwin, who is overseeing the MDL in his Carleston, WV court, began creating the Wave 5 cases in his court. These are a list of 400 oldest cases in the Ethicon MDL. The pretrial activity should be wrapped up September of this year.
The Philadelphia Court of Common Pleas also has a waiting list of transvaginal mesh cases ready for trial. The next one is Engleman v. Gynecare to be heard April 20.
A group of patients and consumers injured by J&J products plans to attend this years Shareholders meeting to be held April 27, 2017 in New Brunswick, New Jersey, the company headquarters. ###
J&J Pelvic Mesh Litigation- Bard and Gynecare
Gynecare Case List –
Updated March 11, 2017 J&J Cases Bergen, Co NJ, 181 pages, 9,009 lawsuits against Ethicon/J&J, 979 Bard cases
List of cases against J&J/Ethicon filed in WV – 37,224 as of March 13, 2017
Securities and Exchange Commission, J&J, Feb. 27, 2017
Bailey Javins & Carter