J&J Pays $120 Million to Resolve State Suits Over Hip Marketing

(Bloomberg) -- Johnson & Johnson agreed to pay $120 million to resolve state attorneys generals’ claims of deceptive marketing in metal-on-metal hip implants some consumers said were defective.

The settlement resolves claims J&J and its DePuy unit misled artificial-hip recipients about how long the devices would last and requires the companies to change the way they market the implants, according to New York Attorney General Letitia James. The state attorneys general alleged DePuy officials wrongly marketed the devices as having a five-year survival rate of more than 90 percent, when European health regulars found the rates were around 5 percent, according to James.

The accord comes as J&J recently reached $400 million in settlements of patient lawsuits over its Pinnacle line of artificial hips. In 2013, the company set aside more than $2.5 billion to end suits over its ASR line of artificial hips. Those devices were pulled off the market in August 2010.

“Companies should never be allowed to freely mislead the public, especially when there are health concerns involved,” James said in her statement. “This settlement serves as an important message that deceptive and false medical practices will never be tolerated.”

Mindy Tinsley, a spokeswoman for the DePuy subsidiary, said the companies didn’t admit “liability or misconduct’’ in the deal with the 46 attorneys generals. The settlement covers the metal-on-metal version of Pinnacle hips, Tinsley added.

In an earnings report Tuesday, J&J acknowledged that its fourth-quarter litigation expenses had doubled to $1.29 billion in part because of settlements over the artificial hips. Over the past two years, juries in federal court in Dallas have ordered the company to pay at least $1.7 billion in damages over claims related to faulty Pinnacle hips. Several verdicts have been thrown out on appeal or reduced by trial judges, including a $1 billion award to six hip recipients that was slashed almost in half.

J&J also recently negotiated a settlement with the Indian government for ASR hip recipients whose devices failed. Consumers who received a faulty ASR hip between 2004 and 2010 are eligible for payments ranging from $42,390 to $172,413, according to Indian news media reports.

The company faces its next Pinnacle trial in federal court in Dallas this month.

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