Swiss company agrees to pay $1 billion for faulty hip, knee replacements


Monday, February 4th 2002, 12:00 am
By: News On 6



CLEVELAND (AP) _ A Swiss medical technology company said Saturday that it has agreed to pay $1 billion to settle thousands of lawsuits brought by people who received faulty hip and knee replacements.

In December 2000, the company was forced to recall thousands of artificial joints after it was disclosed that a manufacturing change had contaminated some with an oily residue that prevented the new joint from bonding with patients' bones.

The agreement was reached Friday night after three days of talks. It replaces Sulzer Orthopedics Inc.'s proposed $783 million settlement. The plaintiffs' lawyers had said that amount was inadequate.

The company, based in Austin, Texas, is a U.S. subsidiary of Sulzer Medica, located in Switzerland.

Sulzer Medica's chief executive, Dr. Stephan Rietiker, praised the proposal as ``a decisive milestone on the path to resolving the U.S. litigation against Sulzer Orthopedics Inc. The patients will quickly receive a considerably larger settlement.''

Urs Kamber, Sulzer Medica's chief financial officer, said from New York City that the final details, including how much money each person would receive, have to be worked out in the agreement reached in U.S. District Court in Cleveland.

``We don't know for certain yet, but it is in the range of $200,000 per patient,'' he said.

Plaintiffs' attorneys also praised the proposal.

``I think this is a settlement that will really provide for patients who had to endure a lot of suffering,'' said Austin attorney Tommy Jacks, who helped negotiate the settlement. ``At the same time, it's a settlement that will not force Sulzer into bankruptcy, because that's when the patients would really lose out.''

The company has said Sulzer Orthopedics might have had to file for bankruptcy if a settlement was not reached.

Sulzer Medica said it will contribute $725 million to the settlement. The deal also includes payments from Sulzer Medica's former parent company, Sulzer AG, and insurance proceeds.

As of Friday, 2,786 patients have had corrective hip surgery and 561 have had corrective knee surgery, the company said. Sulzer Medicas figures up to 4,000 patients may be covered by the final agreement.

Kamber said the company has until Feb. 22 to reach a final settlement and Judge Kathleen O'Malley has scheduled a hearing on the settlement's fairness for May 14.