8-KOther EventsExhibits & Filings

JOHNSON & JOHNSON 8-K Report, Corporate Update (Nov 19, 2013)

Filed November 19, 2013For Securities:JNJ

Summary

Johnson & Johnson (JNJ) announced on November 18, 2013, through its subsidiary DePuy Orthopaedics, Inc., a significant settlement agreement with plaintiffs' lawyers representing ASR™ Hip System patients in the United States. This settlement aims to compensate eligible patients who underwent revision surgery for their ASR hip implant as of August 31, 2013. The U.S. settlement is valued at approximately $2.5 billion, with an estimated 8,000 patients expected to participate. Importantly, this settlement amount has already been accounted for in previously accrued amounts, meaning no additional charge to the company's earnings will be recorded. The majority of these payments are anticipated to be made in 2014, funded by the company's existing cash reserves. While this addresses a significant portion of the ASR hip litigation, Johnson & Johnson notes that existing product liability reserves are based on current information, and future adjustments may be necessary as more information becomes available.

Key Highlights

  • 1DePuy Orthopaedics, a JNJ subsidiary, reached a settlement agreement for the ASR™ Hip System lawsuits.
  • 2The settlement is valued at approximately $2.5 billion for U.S. patients requiring revision surgery.
  • 3An estimated 8,000 patients are expected to participate in the settlement program.
  • 4No additional charge to earnings will be recorded as the settlement amount is covered by previously accrued reserves.
  • 5The majority of settlement payments are projected to occur in 2014, funded by existing cash.
  • 6The company acknowledges that product liability reserves may require future adjustments based on new information.

Frequently Asked Questions

The settlement is an agreement between Johnson & Johnson's subsidiary, DePuy Orthopaedics, and lawyers representing patients who received the DePuy ASR™ Hip System and required revision surgery. It aims to provide compensation to these eligible patients in the United States.

The settlement has an estimated value of $2.5 billion and is expected to be paid out in 2014. Crucially, this amount is covered by previously accrued amounts, meaning there will be no additional charge to Johnson & Johnson's earnings as a result of this specific settlement announcement. The majority of payments will come from existing cash reserves.

Eligible patients are those in the United States who had the ASR™ Hip System and underwent surgery to replace it (revision surgery) on or before August 31, 2013.

Yes, Johnson & Johnson stated that their current product liability reserves are based on available information. As more information becomes available, adjustments to these reserves may be required in the future, although this specific settlement amount is accounted for.