27 July 2019

By : Michael Saldanha, Partner, Atharva Legal

Swathi Bhandary, Partner, Atharva Legal

J&J’s Acetabular Surface Replacement (ASR) hip implant was sold by DePuy in India, the wholly-owned subsidiary of Johnson and Johnson. DePuy issued a voluntary recall of its ASR™ XL Acetabular Hip System and DePuy ASR™ Hip Resurfacing System,. J&J globally recalled these implants in 2010, including from India, after a British study found the models to have higher failure rates, which means there was a higher chance of patients requiring a revision surgery to replace them. A health ministry expert committee set up in 2017 to look into this issue said the design of the implants led to high wear and tear and, in several cases, increase in the body’s chromium and cobalt levels. This makes them potentially toxic and leaves organs vulnerable to damage, according to the committee report, which was made public late in 2018. Johnson & Johnson has been accused of selling its faulty ASR hip implants to approximately 4,700 Indian patients between 2004 and 2010. Only 1,080 patients have been traced till date. ASR Hip System recall is concerning for patients, their family members and surgeons. These systems first became commercially available in July 2003 globally, and in June 2004 in India. If you had your hip surgery prior to June 2004 or after 24 August 2010 in India, the hip you received is not subject to the ASR recall.

Formula proposed by government

The formula, approved by the health ministry earlier by expert committee under Dr. R.K. Arya recommended, proposes compensation of anywhere between Rs 30 lakh and Rs 1.23 crore, depending on the patient’s age and level of disability due to the implant. The compensation amount varies from ₹ 33 lakh to ₹ 1.2 crore, the health ministry release revealed. For example, in case the disability is on a higher scale (50%) and the person underwent the hip surgery at a young age of 20, the quantum of compensation will be over ₹ 1.2 crore that is maximum compensation. If the person underwent a surgery when he/she was 60 years or above and the disability is measured at the scale of 10%, he/she will be entitled to get a minimum of ₹ 33 lakh.

USA scenario

Johnson & Johnson agreed in a Texas court to shell out $1 billion to settle about 6,000 lawsuits filed against the global pharma giant by patients in the US who used its “defective” Pinnacle hip implants for 10 years from 2003 to 2013 before the product was withdrawn the damage was already done by leak of cobalt-chromium ions from the implant into the body, leading to serious health complications, including metal poisoning of the blood, debilitating pain, and damage to body organs. J&J announced a $4 billion settlement to cover the claims raised by 12,000 patients in the U.S.

Challenge before court

In 2017 when the Drug Controller General of India (DCGI) set up a committee of experts to probe the matter. This committee stated that J&J, as part of its global recall, had published advertisements in two English language newspapers informing patients that it was affecting recall of the ASR hip implants and would pay for the revision surgery of those patients who required the implant replaced. Apparently 1,032 Indian patients contacted the company in response to these advertisements. And of these patients, the company paid for revision surgeries of 254 patients, while another 774 patients were kept on monitoring. The remaining 3,600 patients are likely not even aware of the issues with their hip implants because J&J did not contact each patient individually.

Our Drugs and Cosmetics Act did not have a provision for compensation. J&J's main contention is that there is no provision under current law to compensate patients. We have already taken steps to plug the gap. Globally, J&J is paying affected patients, mostly through litigation or out-of-court settlements. It was also said “we have not been given an opportunity to appear before the Central Experts Committee. Critical gaps and factual inaccuracies have been allowed to stand uncontested. The formula for compensation needs to be within a fully transparent and legal framework, arrived at through due process, and only after proper hearing of the facts and positions of all parties. The outcome also needs to be within a legal framework which is applicable across the industry”. When the DCGI ordered J&J to pay compensation as per the formula laid down by the expert committee, its order was challenged before the Delhi High Court on April 8, 2019 by J&J which argued, and rightly so, that only courts of law and not regulators like the DCGI could order payment of compensation. When the DCGI ordered J&J to pay compensation as per the formula laid down by the expert committee, its order was challenged before the Delhi High Court on April 8, 2019 by J&J which argued, that only courts of law and not regulators like the DCGI could order payment of compensation. In May 2019, the company struck an entirely different chord, claiming that it was willing to pay ₹25 lakh to patients who had revision surgery and approached the government’s committee, provided that the payment was not construed as an acceptance of any liability. As per the court’s order, this settlement offer would not affect the patient’s right to claim further compensation subject to the fact that any possible future award of compensation from a court would have to be adjusted with the ₹25 lakh already paid. The order records that J&J was in effect extending this offer to merely 67 of the 289 patients who had approached the ‘expert committee’ of the Central government because only these 67 patients had been “verified” and had received revision surgeries. If the government wins the case, and the court says the formula approved by the government is correct, then the company will have to pay the remaining amount to the patients. However, if the government loses the case, this amount would remain non-refundable
according to the court’s order.