by Christopher Freeburn | August 21, 2013 10:04 am
Unnamed insider sources tell Bloomberg that Johnson & Johnson (JNJ) is contemplating a $3 billion payout to settle litigation over defective hip implants.
The health-care product maker is facing a wave of lawsuits over the hip implants, which were recalled in 2010 due to 12% failure rate. More than 93,000 implants were recalled around the world; 27,000 of those were in the U.S. Johnson & Johnson is now grappling with 11,500 lawsuits in the U.S.
Under a plan being discussed by company executives, Johnson & Johnson would pay each plaintiff more than $300,000 in order to settle the lawsuits. That would result in a total settlement half again as large as the company has previously considered.
Between September and January, seven lawsuits over the implants will go to trial. Johnson & Johnson’s management is said to be closely watching the trials and will decide on the settlement package based, in part, on their outcomes.
So far, the company’s trial record over the implants is mixed. It lost a California lawsuit, resulting in an $8.3 million jury award, but won a Illinois case. In the California lawsuit, company reports surface indicating that Johnson & Johnson knew about problems with the hip implants up to two years prior to the recall.
Shares of Johnson & Johnson dropped more than 1% in Wednesday morning trading.
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