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Sulzer Medica faces crucial court decision

Sulzer Medica's future hangs in the balance Keystone Archive

The medical technology company, Sulzer Medica, is facing a crucial US legal ruling on Thursday that could seriously damage the company's future.

The court of appeals in Cincinnati, Ohio, is to decide whether to lift the suspension on the launch of individual liability lawsuits against the company.

In a nightmare scenario, Sulzer Medica faces hundreds of lawsuits over faulty hip and knee implants in the US. Nearly two thousand patients have had to undergo revision surgery because the artificial implants failed to bond properly with the bone.

Sulzer Medica wants to proceed with a class action settlement that would be far less costly for the company.

It has set aside $783 million for the settlement of the cases but if the appeals court decides to let individual cases proceed, it would torpedo Medica’s hopes and damage the future of the company.

$15 million award

In a recent case in Texas, a court awarded three patients a total of $15 million in compensation, including punitive charges, roughly 50 times the sum per patient offered in the class settlement.

In a statement on Wednesday, the firm’s CEO, Stephan Rietiker, said his highest priority was the settlement.

“We will fight with every legal measure against preferential treatment for only a few, which openly discriminates against the majority of affected patients,” said Rietiker.

But the company is also preparing for a negative ruling. It said it would seek Chapter 11 bankruptcy protection for its American unit, Sulzer Orthopaedics, that produced the faulty implants.

Sulzer options

He said the company would try to protect its US business and as many jobs as possible.

Analysts say it’s difficult to predict the outcome of Thursday’s decision by the three appellate judges.

If it should go against Sulzer Medica, the company still has the option to seek a hearing “en banc” with the full complement of 12 appeal judges.

But that would prolong the legal agony and cause further damage to Sulzer Medica’s already tarnished reputation.

Shares in the company, which was spun off from its former parent Sulzer earlier this year, have already fallen 86 per cent this year.

swissinfo with agencies

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR