Stryker Says Hip Recall to Cost Up to $390M (Claims Journal)
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 said.
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 ...
