Medica says 132 shun US settlement

Robots help produce prosthetic devices at Sulzer Medica's headquarters in Winterthur Keystone

Sulzer Medica is facing lawsuits from 132 plaintiffs who have refused the company's offer to settle a class-action case over faulty implants.

The medical devices group said about 99.6 per cent of patients who were suing over faulty hip and knee implants had accepted its settlement offer of SFr1.6 billion ($1 billion).

Medica added that it would spend the next five business days trying to negotiate with the opt-outs to encourage them to join the settlement.

Those who do so will not be able to pursue further claims against the company, which has until May 22 to give its final approval to the settlement.

“We will use the time available to us to finalise our decision, and we are confident of a positive outcome,” said Medica CEO, Stephan Rietiker.

Plaintiffs were given until Wednesday to opt out of the settlement, which is intended to compensate patients who were given faulty hip and knee implants, made by Medica.

The company now faces a string of million-dollar lawsuits from individual patients, who remain outside the class-action settlement.

It has already said it may be forced to file for Chapter 11 (protection from creditors) in the US if the number of patients that opt out is too high.

Not out of the woods

Spokesman Andy Bantel confirmed that the company was still not out of the woods over the issue and that the 120 patients could still bring the company to its knees.

“Potentially yes… but there won’t be any more opt-outs. The number can be reduced by negotiations that we will lead in the next couple of days. At the end of the next five working days, we will decide how to proceed. This will be on May 23,” he told swissinfo.

Asked whether the company had set a ceiling of money it was prepared to pay out, Bantel commented that this figure was contained in the settlement.

“Besides that, we also said we have a certain number of provisions made specially for opt-outs but we have never mentioned a figure,” he added.

Sulzer Medica recalled thousands of implants in December 2000 after a manufacturing problem contaminated them with an oily residue, preventing them from bonding with patient’s bones.

Healthy profits

The deadline for opt-outs came as the company posted healthy first quarter figures, with profits up 52 per cent to SFr44 million ($27.2 million), compared with the same period last year.

It also revealed on Thursday that, from June 1, it would be changing its name to “Centerpulse” – a move planned since Medica was spun off last year from its parent company, Sulzer.

Asked whether the name change would remove some of the stigma attached to Sulzer Medica since the hip and knee implant recall, Bantel told swissinfo that this was not the aim of the rebranding.

“But of course it would be a welcome side effect,” he said.

Earlier this month, Sulzer Medica was also forced to replace faulty heart valve testers in 50 countries after a patient died in Britain.

swissinfo with agencies