Johnson and Johnson 2015 Annual Report Download - page 77

Company has established accruals for product liability claims and lawsuits in compliance with ASC 450-20 based on
currently available information, which in some cases may be limited. The Company accrues an estimate of the legal
defense costs needed to defend each matter. For certain of these matters, the Company has accrued additional amounts
such as estimated costs associated with settlements, damage and other losses. Product liability accruals can represent
projected product liability for thousands of claims around the world, each in different litigation environments and with
different fact patterns. Changes to the accruals may be required in the future as additional information becomes available.
The most significant of these cases include the DePuy ASR™ XL Acetabular System and DePuy ASR™ Hip Resurfacing
System, the PINNACLE®Acetabular Cup System, pelvic meshes, RISPERDAL®, and XARELTO®. As of January 3, 2016,
in the United States there were approximately 5,300 plaintiffs with direct claims in pending lawsuits regarding injuries
allegedly due to the DePuy ASR™ XL Acetabular System and DePuy ASR™ Hip Resurfacing System, 8,700 with respect
to the PINNACLE®Acetabular Cup System, 46,700 with respect to pelvic meshes, 10,700 with respect to RISPERDAL®,
and 5,000 with respect to XARELTO®.
In August 2010, DePuy Orthopaedics, Inc. (DePuy) announced a worldwide voluntary recall of its ASR™ XL Acetabular
System and DePuy ASR™ Hip Resurfacing System used in hip replacement surgery. Claims for personal injury have been
made against DePuy and Johnson & Johnson. The number of pending lawsuits is expected to fluctuate as certain lawsuits
are settled or dismissed and additional lawsuits are filed. Cases filed in federal courts in the United States have been
organized as a multi-district litigation in the United States District Court for the Northern District of Ohio. Litigation has
also been filed in countries outside of the United States, primarily in the United Kingdom, Canada and Australia. In
November 2013, DePuy reached an agreement with a Court-appointed committee of lawyers representing ASR™ Hip
System plaintiffs to establish a program to settle claims with eligible ASR Hip patients in the United States who had
surgery to replace their ASR Hips, known as revision surgery, as of August 31, 2013. This settlement covered
approximately 8,000 patients. In February 2015, DePuy reached an additional agreement which would effectively extend
the existing settlement program to ASR Hip patients who had revision surgeries after August 31, 2013 and prior to
February 1, 2015. This second agreement is estimated to cover approximately 1,800 additional patients. The estimated
cost of these agreements is covered by existing accruals. This settlement program is expected to bring to a close
significant ASR Hip litigation activity in the United States. However, many lawsuits in the United States will remain, and the
settlement program does not address litigation outside of the United States. The Company continues to receive
information with respect to potential costs associated with this recall on a worldwide basis. The Company has established
accruals for the costs associated with the DePuy ASR™ Hip program and related product liability litigation. Changes to
these accruals may be required in the future as additional information becomes available.
Claims for personal injury have also been made against DePuy and Johnson & Johnson relating to DePuy’s PINNACLE®
Acetabular Cup System used in hip replacement surgery. The number of pending product liability lawsuits continues to
increase, and the Company continues to receive information with respect to potential costs and the anticipated number of
cases. Cases filed in federal courts in the United States have been organized as a multi-district litigation in the United
States District Court for the Northern District of Texas. Litigation has also been filed in countries outside of the United
States, primarily in the United Kingdom. The Company has established an accrual to cover only defense costs in
connection with product liability litigation associated with DePuy’s PINNACLE®Acetabular Cup System. Changes to this
accrual may be required in the future as additional information becomes available.
Claims for personal injury have been made against Ethicon, Inc. (Ethicon) and Johnson & Johnson arising out of Ethicon’s
pelvic mesh devices used to treat stress urinary incontinence and pelvic organ prolapse. The number of pending product
liability lawsuits continues to increase, and the Company continues to receive information with respect to potential costs
and the anticipated number of cases. Cases filed in federal courts in the United States have been organized as a multi-
district litigation in the United States District Court for the Southern District of West Virginia. In addition, class actions and
individual personal injury cases or claims have been commenced in Australia, Belgium, Canada, England, Israel, Italy, the
Netherlands, Scotland and Venezuela, seeking damages for alleged injury resulting from Ethicon’s pelvic mesh devices.
The Company has established an accrual with respect to product liability litigation associated with Ethicon’s pelvic mesh
products. Changes to this accrual may be required in the future as additional information becomes available.
Claims for personal injury have been made against Janssen Pharmaceuticals, Inc. and Johnson & Johnson arising out of the
use of RISPERDAL®, indicated for the treatment of schizophrenia, acute manic or mixed episodes associated with bipolar I
disorder and irritability associated with autism, and related compounds. The number of pending product liability lawsuits
continues to increase, and the Company continues to receive information with respect to potential costs and the
anticipated number of cases. The Company has established an accrual with respect to product liability litigation
associated with RISPERDAL®. Changes to this accrual may be required in the future as additional information becomes
available.
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