Medica agrees settlement over implants

Thousands of artificial hip and knee joints needed to be replaced Keystone

Sulzer Medica is one stage closer to ending a long-running battle with disgruntled patients in the United States over faulty hip and knee implants.

The company said on Thursday that it had formally submitted a finalised class action settlement proposal to a United States District Court in Cleveland, Ohio.

The proposal is to settle thousands of claims, mainly from elderly patients in the US, who needed replacement operations for lubricant-tainted hip or knee implants produced by Sulzer Medica’s US facility. The hip joints were recalled at the end of the year 2000.

Medica said all involved parties agreed to and signed the final wording, with Cleveland judge Kathleen O’Malley giving preliminary approval to the proposed $1 billion (SFr1.7 billion) settlement.

Sulzer Medica spokeswoman, Beatrice Tschanz, said the agreement represented a milestone both for the company and for affected patients.

“This final settlement proposal is now signed by all involved parties,” Tschanz told swissinfo.

The opt out period runs from April 12 to May 14 with the so-called Final Fairness Hearing scheduled for May 6.

Uncertainty

The settlement moves closer to ending the uncertainty hanging over the Winterthur-based company, which had said it would have to put its US subsidiary into Chapter 11 protection from creditors if claims got out of hand.

Concerns about the faulty implants caused Sulzer Medica’s share price to fall by nearly 84 per cent last year.

Under the terms of the proposed plan, signed by all parties in the dispute, the total payment from Sulzer Medica would be $725 million, in the form of $425 million in cash and $300 million in financial instruments.

“The important thing is that the settlement is here…and after the final fairness hearing, the last milestone in this over seven months work will be the end of the opt-out period,” Tschanz said.

Sulzer Medica’s former parent company, Sulzer, and insurers are set to pay the rest of the deal.

Sulzer is to pay $50 million in cash and will also make its remaining 480,000 shares available for settlement purposes.

The compensation to patients will amount to about $200,000 each. As of February 1, some 2,786 people had undergone hip revision surgery, while 561 patients had revision knee implant operations.

swissinfo with agencies