* Sees charge of 35 cents/shr in Q4 for hip recall
* Total cost will depend on several variables
* Advises patients to see doctor even if there are no
Jan 9 Stryker Corp on Wednesday said a
hip implant recall begun last June will cost $190 million to
$390 million for patient testing and treatment, new surgeries,
lawsuits and insurance payments.
The company said it increased the low end of its
expectations for these costs and as a result also raised its
related financial reserves. It will result in a fourth-quarter
charge of 35 cents per share, or $174 million before taxes,
Stryker, which also makes power tools, surgical accessories
and hospital beds, recalled its Rejuvenate and ABG II
modular-neck hip devices in June of 2012, saying there was a
risk for corrosion, which may result in local tissue damage as
well as pain and swelling. It provided the new cost information
on Wednesday with its financial outlook for the fourth quarter
and full year.
The company has hired third-party claims administrator
Broadspire Services to help deal with patients who need to have
their recalled hip implants replaced.
The eventual total cost of the recall will depend on several
variables, Stryker said, including the number of patients who
require testing and follow-up procedures and the cost of
Stryker advised all patients who have the Rejuvenate Modular
or ABG II modular-neck hip implants to consult a doctor.
"It is important that you follow-up with your surgeon, even
if you are not experiencing symptoms such as pain and/or
swelling at or around your hip," Stryker said on its website.
The company said blood tests and imaging tests, such as
X-ray, MRI or ultrasound, may be ordered to evaluate the device.
Stryker's recall last summer followed similar action from
other orthopedic device manufacturers, including Johnson &
Johnson, which initiated the biggest hip recall and also
subsequently hired Broadspire to help manage patient care and
limit its financial exposure.
Hip implants made of all metal, known in the industry as
metal-on-metal, have been especially problematic. In addition to
high failure rates and other pitfalls, they may release metals
into the bloodstream over time. It is unclear what the long-term
consequences of high levels of metal in the blood may be.
"The issue of greatest concern is the potential for elevated
metal ions in the bloodstream and the damage that can be caused
to the muscles, tendons, soft tissue and bone," said Dr. Mary
O'Connor, an orthopedic surgeon at the Mayo Clinic in
"Soft tissue damage is more critical than bone damage. If
the bone is damaged, we can do something. But if the muscle is
dead because it has been poisoned by metal ions, we can't
recreate it," she said.
It is too early to say whether the problems will be as great
as those suffered by patients who got the ASR hip implant made
by J&J, she said. "But its the same basic problem of metal ions
poisoning the tissues."
Stryker shares were up $1.46, or 2.5 percent, at $58.43 in
afternoon trading on the New York Stock Exchange.