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DePuy Enters Settlement Agreement With United State Department of Justice (In case you missed it…)

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DePuy Orthopaedics and its recent ASR Recalled Hip Replacement system has been the subject of controversy the past couple of months.  DePuy led thousands of patients with damaged hips to believe that their ASR Hip Replacement System will improve the pain and mobility of their hip.  However, the results have been dramatically different.  The recalled hip implant used metal-on-metal device that contained elements of cobalt and chromium.  Pieces of the metal have been found to grind off the hip implant damaging surrounding muscles and tissues and increasing the level of dangerous metal ions into the body.  In some cases, patients had to receive a second hip surgery.

The ASR hip implant failure rate has been steadily growing since 2007 when 100 cases were reported. This grew to 200 cases in 2008 and 300 cases in 2009. In December 2009 these high rates could no longer be ignored and DePuy took the hip replacement device off the Australian market. Although problems with the implant had been apparent for more than two years, DePuy claimed the product was being removed due to slow sales. It was not until March 2010, almost three years after statements of failure were first reported, that DePuy informed physicians of the failures of the ASR hip replacement.

Interestingly enough, DePuy Orthopaedics entered into a settlement agreement with the United State Department of Justice on behalf of the Office of Inspector General of the Department of Health and Human Services in 2007.  The settlement agreement was around fifteen pages and full of some shocking data.  DePuy was under the spotlight then and now is facing even more scrutiny.

In the beginning of the agreement, it states that

“the United States contends that it has certain civil claims, against DePuy…for engaging in the following conduct during the period from January 1, 2002 to December 31, 2006.  DePuy used, and conspired to use, various forms of financial arrangements to induce orthopaedic surgeons to cause providers to use DePuy’s hip and knee joint replacement implants in order to maintain and increase DePuy’s market share.  These financial arrangements came in the form of fee-for-service contracts, fixed fee contracts, and product development contracts, among others.  The United States contends that certain of these financial arrangements were improper, that the remuneration paid thereunder was improper and/or unlawful, and that these arrangements caused hospitals and physicians to submit false and fraudulent claims for replacement of hip and knee joints using DePuy implants to Medicare.”

In 2007, DePuy denied that is engaged in any wrongdoing mentioned above.  DePuy claimed in the agreement, that the settlement agreement is not an admission of any facts or liability by the company.

The reason DePuy claimed in 2007 to be entering into this settlement agreement is to avoid uncertainty, inconvenience, delay and the expense of litigation.  In the settlement agreement, DePuy agreed to pay $84,796,800 to the U.S. by electronic fund transfer.  The agreement was a deferred prosecution agreement and if DePuy did not follow through with the terms, it would then allow the U.S. to go forward with prosecution and furthermore allow OIG-HHS to exclude DePuy from participating in all Federal Health care programs.  Violation of the agreement could also allow imposition of civil monetary penalties and assessments against DePuy.  In the agreement, DePuy agreed to hold the Federal health care programs and federal beneficiaries harmless from any financial responsibility for services or items manufactured, distributed or furnished to such providers.

In return for the settlement, the U.S. agreed to release DePuy from any civil or administrative monetary claim the U.S. had or may have under the False Claims Act, the Antikickback Act, the Civil Monetary Penalties Law, the Program Fraud Civil Remedies Act, and any statutory provision applicable to the federally-funded programs in this agreement.

DePuy also waived the assertion of any defenses DePuy may have to any criminal prosecution or administrative action relating to the Covered Conduct which defenses may be based in whole or in part on contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution or under the Excessive Fines Clause in the Eight Amendment.

The agreement was signed in September 27, 2007.

It expected much of the information and details learned in this process will be brought to life again as more and more DePuy ASR Hip implant lawsuits are filed on behalf of patients and consumers around the world. There are currently 100s of cases field against DePuy (in MDL 2197 and various states courts all over the United States) and the related entities that placed the ASR Hip implant into the stream of commerce. Childers, Schlueter & Smith continue to be at the forefront of this hip implant litigation and continue to represent and review DePuy ASR cases as well as other metal-on-metal hip implant claims. If you have concerns about your hip implant and need answers about the same, please give us a call. We are happy to help in any way we can.

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