Costs Of ASR Recall Affects J&J’s Q2 Earnings
Johnson & Johnson released its second quarter numbers last week and the effects of the ASR recall are evident. Reportedly, Johnson & Johnson paid $223 million in connection with the ASR recall, contributing to a lower-than-typical $2.8 billion net income for the second quarter, down from a net income of $3.5 billion in the second quarter of 2010.
Costs of the ASR Recall Expected To Rise For Johnson & Johnson
Earlier this month, the Wall Street Journal estimated that the number of plaintiffs in hip replacement lawsuits has reached over 1,000 and the litigation costs that Johnson & Johnson may face concerning the ASR recall could top the initial estimates of about $920 million. The attempts by DePuy – the Johnson & Johnson subsidiary responsible for manufacturing the badly designed ASR – to mitigate these costs by offering to pay out-of-pocket medical costs to those that suffered a premature failure of the device could not keep the overall costs from rising.
Johnson & Johnson remains optimistic about three new products that gained U.S. Food and Drug Administration (FDA) approval during the second quarter:
• 4/28: Zytiga, for the treatment of late-stage prostate cancer
• 5/20: Endurant, for the treatment of the early stages of HIV
• 7/5: Xarelto, used to reduce the risks of blood clots, deep vein thrombosis, and pulmonary embolism following hip or knee replacement surgery
It is yet to be seen what kind of effect this will have on the company’s performance in the third quarter of its fiscal year.
ASR Litigation Will Continue To Grow
The number of plaintiffs filing a depuy lawsuit against Johnson & Johnson continues to grow, and so does the expenses the companies are facing from the recall and subsequent litigation. This is reflected in their respective bottom lines.
If you have suffered a failure of your ASR hip replacement device then you could have a claim to compensation from DePuy and Johnson & Johnson for the harm you have suffered. The attorneys at the Rottenstein Law Group are committed to helping their clients get the compensation they deserve after being wronged by a negligent company. For a free consultation with an RLG attorney, please fill out this brief contact form.