'Billion Dollar Baby': Lawsuits over profit, pain and the hip implant some call 'toxic'
Angie Rodriguez considers herself a medical experiment gone wrong.
"In this slide here, it shows a piece of metal," says Angie as she showed Eyewitness News a pathology image of the diseased tissue surgeons removed from her hip while replacing her two failed DePuy Pinnacle metal-on-metal hip implants.
"On my right hip, I noticed a growth," Angie says. "It was a half of a grapefruit-sized pillow of fluid is what it turned out to be, and they said it was a pseudotumor... they said it was a pocket full of fluid and metal debris."
Angie is one of six California plaintiffs to allege in a recent federal trial that patients with these all-metal hip implants were unknowing guinea pigs, that influential orthopedic surgeons were paid millions of dollars to help market the hips, and that the manufacturer, DePuy Orthopaedics, ignored warnings from its own surgeons of potentially catastrophic complications.
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The Pinnacle hip implant racked up enormous profits for DePuy and became known as the company's "Billion Dollar Baby," before the troubled metal-on-metal version was taken off the market in 2013. It might surprise you to learn, this artificial hip was not tested in humans before it was sold and surgically implanted into about 150,000 Americans.
"Metal ions! What are they doing to my liver, my kidneys, my heart?" asks Angie.
Metal ions and debris are potentially toxic to the human body. When metal components of the hip implant grind against each other, they can shed traces of cobalt and chromium debris or ions into the body. That can lead to pseudotumors and set off a reaction destroying muscle and bone. These tiny metal ions can enter the bloodstream and travel throughout the body.
Texas attorney Mark Lanier led the legal team that won the staggering $1.04 billion verdict against DePuy and its parent company Johnson & Johnson in a hard-fought trial that spanned eight weeks of late 2016 inside a federal courtroom in Dallas.
"The problem is the DePuy, Johnson & Johnson Pinnacle metal-on-metal was never tested in one single human being before they started selling it," Lanier told Eyewitness News. "And the company basically made guinea pigs out of everyone who received it."
A federal jury found the companies negligently designed, sold and fraudulently marketed the allegedly defective hip implants, failed to adequately warn doctors, and concealed the implant's potential risks.
Judge Ed Kinkeade later slashed the combined $1.009 billion in punitive damages nearly in half, ruling that the U.S. Constitution limits how much a plaintiff can recover in punitive damages.
DePuy and Johnson & Johnson are appealing the verdict and contend the "trial was rife with legal and evidentiary" errors. Attorneys for DePuy argued at trial that their metal hip implants filled a need by reducing dislocations and a type of bone tissue damage known as "osteolysis" - problems that were common with an older type of hip implant made from polyethylene or plastic.
BIG MONEY: $184.7 MILLION TO DESIGN SURGEONS ON PINNACLE HIP
"Two banker's boxes of spreadsheets of the payments they've been making to doctors," said Lanier as he showed Eyewitness News records used at trial that show DePuy paid its Pinnacle hip "design surgeons" more than $184 million in royalties.
In all, eleven orthopedic design surgeons on the Pinnacle hip system received royalty payments from DePuy ranging from about $2 million, up to $32, $43 and $44 million.
DePuy says there's nothing improper about paying design surgeons for their intellectual property and design know-how.
But Lanier argued at trial that DePuy used the "key opinion leader" surgeons as "marketers" and that those royalty payments amount to "kickbacks," because design surgeons are paid a percentage of nearly every one sold.
Lanier told the jury that sets up an ethically dicey incentive for those influential design surgeons to help sell the implants by writing positive articles in medical journals, giving speeches to other surgeons and training medical residents on the use of the products.
"All of the money funnels back up... and so, you've got these guys at the top who are making $20, $30, $40 million," Lanier tells Eyewitness News.
FEDS PREVIOUSLY CRACKED DOWN ON DEPUY AND JOHNSON & JOHNSON FOR ALLEGED KICKBACKS AND BRIBES
DePuy and Johnson & Johnson have come under the crosshairs of the U.S. Department of Justice for certain other payments to surgeons in the past.
In 2007, without admitting to any wrongdoing, DePuy entered into what's known as a "Deferred Prosecution Agreement" with the federal government to avoid criminal prosecution for allegedly conspiring to violate the Federal Anti-Kickback statute by paying orthopedic surgeons through "consulting agreements" to use only DePuy Products.
The 2007 criminal complaint was dismissed as part of the agreement after DePuy completed an 18-month period of independent monitoring and agreed to new corporate compliance procedures. DePuy paid $84.7 million to settle related potential civil charges with the federal government. The Deferred Prosecution Agreement did not include any admission of wrongdoing, although DePuy was required to "acknowledge responsibility for its behavior."
In 2011, Johnson & Johnson paid $70 million to settle criminal and civil charges brought under the Foreign Corrupt Practices Act that some of its foreign subsidiaries bribed doctors in Greece, Romania and Poland to use their products - and paid kickbacks to the Iraqi regime of Saddam Hussein under a United Nations Oil-for-Food program rife with fraud.
PINNACLE HIPS: DEPUY'S "BILLION DOLLAR BABY"
"Taking Shares of Business" was the theme of a Mardi Gras-style musical parade at a 2008 DePuy sales conference. The video, shown to jurors, shows DePuy's then-top marketing guru leading the parade alongside costumed alligators, a bloody man with a hatchet and a giant metal hip implant. "Taking Shares of Business" was a play on lyrics from the 1970s-era song "Takin' Care of Business" by the Canadian rock group Bachman-Turner Overdrive.
The star speaker at the sales conference? Renowned orthopedic surgeon Dr. Thomas Schmalzried who practices in Los Angeles. Dr. Schmalzried is one of eleven design surgeons on DePuy's Pinnacle hip system - which includes the metal-on-metal "Ultamet" version that critics say can leach toxic metal debris into patients' bodies.
"I thank you," says Dr. Schmalzried to DePuy's sales force, who've sold $1 billion worth of DePuy Pinnacle hip products. "But did you know you can sell even more? Did you know that the 1st billion is the hardest?"
"You're thanking them - is that because you get a cut on it?" attorney Mark Lanier asks Dr. Schmalzried in a videotaped deposition for a series of related metal-on-metal hip implant cases against DePuy and Johnson & Johnson.
"Maybe, I don't know," answers Dr. Schmalzried.
Dr. Schmalzried, who is 6-foot-ten and played basketball at Stanford University, testified at trial that he's made about $30 million in royalty payments from DePuy - more than he's ever made treating patients.
In the deposition and at trial, Lanier pressed Dr. Schmalzried about his interest in marketing DePuy products - and showed jurors emails where the surgeon discussed "crafting the message" and the "key to the marketing success" of various products for which he's paid royalties.
At the sales conference in New Orleans, Dr. Schmalzried referred to the hip implant as the company's "Billion Dollar Baby" and a neon sign hanging overhead reinforced the message - Pinnacle hips were extremely profitable for DePuy.
"A billion here... a billion there... pretty soon it adds up to some real money," Dr. Schmalzried told sales representatives.
"I don't use the term 'cut'... it's a royalty," Dr. Schmalzried tells Lanier in the deposition.
"It's a percentage?" Lanier asks. "I get a percentage of what's sold, yes sir," replies Dr. Schmalzried.
Dr. Schmalzried and DePuy's defense attorneys told jurors at trial that it's important to have surgeons on the design team who interact with actual patients - and that he and other design surgeons provided "valuable input and know-how."
"Anyone here want to go for two?" Dr. Schmalzried asks the sales force in the video shown to jurors. "I'll say it again -- anyone here want to go for two?"
"Now would you agree with me you are hyping the sales team into going out and selling more?" attorney Lanier asks Dr. Schmalzried in a 2014 deposition.
"Yes," Dr. Schmalzried replies.
Dr. Schmalzried was not named as a defendant in this lawsuit, but because he is a "design surgeon" on the Pinnacle Ultamet hip implants, he is named as a defendant in about 865 other lawsuits. As part of his contract with DePuy, the company covers any legal costs or judgments related to those lawsuits.
Dr. Schmalzried testified in this trial as a witness, telling the jury he implanted 59 Ultamet metal-on-metal hip implants in his own patients and stopped using them in 2010.
"I don't think there was a conscious decision on that date," Dr. Schmalzried testified. "That just happens to be the date when the last patient that I thought the benefit/risk ratio - that I thought they were the right patient for that bearing."
Lanier asked Dr. Schmalzried at trial if he continued to "rack up" a cut of sales even after he stopped using the implants in 2010?
"I - I was still paid a royalty which was independent of whether or not I used the product," Schmalzried testified.
Attorney Lanier showed jurors two PowerPoints Dr. Schmalzried created and used at orthopedic presentations that compare the size and position of hip implants to the size of women's butts.
"I apologize... to anyone that that picture may offend," Schmalzried testified.
Dr. Schmalzried declined to speak with Eyewitness News, but testified at trial that the Pinnacle Ultamet metal-on-metal hip implant was a good alternative to an older type of plastic hip, especially for younger, more active patients.
FDA "LOOPHOLE" ALLOWS METAL IMPLANTS ON THE MARKET WITHOUT PROVING SAFETY
Attorney Mark Lanier told jurors at trial that DePuy rushed the Pinnacle metal-on-metal hip implant to market without ever testing it in humans - arguing it was a drive for profits at the expense of patient safety.
"It's pedal to the metal, full guns blazing - let's sell as many as we can, as fast as we can, grab the market share that we can," Lanier told ABC7 of DePuy's alleged rush to market. "We'll figure out later how it's doing."
DePuy and many other medical device manufacturers used what critics call a "loophole" to fast-track the metal-on-metal implants through the Food and Drug Administration clearance process.
Unlike new drugs, the FDA did not require any metal-on-metal hip implants to be tested in humans before they were put on the market and implanted into hundreds of thousands of patients.
That loophole, officially known as the FDA's 510(k) regulatory pathway, allowed manufacturers including DePuy, to skip clinical trials and test the implants only on mechanical simulators if they could show the implants were "substantially equivalent" to other devices already in use.
In 2013, public health experts writing in the New England Journal of Medicine called on the FDA to close the loophole, noting that studies in humans "might have identified the high revision rate of the ASR," another metal-on-metal hip implant DePuy recalled in 2010 amid sharply rising early failure rates. DePuy and Johnson & Johnson ultimately agreed to pay more than $2.5 billion to resolve thousands of ASR-related lawsuits.
"As thousands of Americans are painfully learning, there are unknown risks with devices that enter the market without clinical data showing safety and effectiveness, and implanted body parts cannot be recalled as easily as defective auto parts," wrote the authors.
Defense attorneys for DePuy noted that 21 different manufacturers, not just DePuy, used the 510(k) pathway to clear a total of 188 variations of metal-on-metal implants through the FDA.
"It was very shocking to find out that they didn't have to have testing in people in order to get this cleared," Angie Rodriguez tells Eyewitness News.
"When you say FDA, you think - OK, FDA - they have to 'approve' things. Then we found out they don't have to 'approve' them, they can 'clear' them - a whole different ballgame."
The FDA began to close that regulatory "loophole" in 2013 as concerns grew over the metal-on-metal hips. The FDA noted the "unique risks" inherent in all metal-on-metal implants and said it would begin to require manufacturers to either prove their implants were safe through clinical tests, or stop selling them.
"And when the FDA realized how tragically wrong this system could be abused, they shut it down for metal-on-metal hips and said - no metal-on-metal hip will be approved this way again," said Lanier of the FDA's demand for more rigorous, human tests.
"In fact, if you're going to continue to sell, you've got to show us that they actually should be approved - you can no longer rely on that loophole. And that's when the companies pulled its products," said Lanier.
DePuy did pull its Pinnacle Ultamet metal-on-metal hip off the market in 2013, in part due to that change in FDA rules, but maintains it was due to declining sales - and "not related to safety or efficacy, and is not a recall."
SURGEON: "HORRIBLE, ROTTEN, DAMAGED FLESH" IN WORST CASES
Dr. Tony Nargol is a one-time "consultant surgeon" for DePuy and testified that he tried to warn DePuy that metal-on-metal hips at his hospital in England were failing at high rates.
Dr. Nargol told jurors about the "horrible, rotten, damaged flesh" he'd find inside some of his patient's bodies while removing and replacing their metal-on-metal hip implants after they experienced problems.
"It's quite unbelievable in the bad cases," Dr. Nargol tells Eyewitness News. "You go in there, you touch the muscle and it just disintegrates - it just like liquefies - it's just destroyed in your hand."
The British surgeon told jurors that DePuy was in "total denial" when he raised alarm bells with the company about the Pinnacle Ultamet hip implant. Nargol testified that DePuy labeled him as an "outlier" even though he'd also previously warned the company about the ASR hip implant, which was eventually recalled.
"They put the blame on myself and my colleagues," Nargol recalled to Eyewitness News of suggestions that the problems may have been due to poor surgical technique. Dr. Nargol's hospital in England eventually conducted its own recall, testing patients for pseudotumors and high levels of cobalt and chromium. Nargol now testifies as an "expert witness" in lawsuits against DePuy and Johnson & Johnson -- and has a pending "whistleblower" lawsuit against the companies.
Lanier asked Dr. Nargol if DePuy ever told him that other surgeons had stopped using metal-on-metal? Did DePuy ever tell him of hundreds of complaints from surgeons in Japan?
No, Nargol told the jury -- "I was totally misled."
Another witness at trial was orthopedic surgeon Dr. Herbert Huddleston of Tarzana who testified he's taken out dozens of failed metal-on-metal hip implants. Dr. Huddleston acknowledged to DePuy's defense attorney that the only way to make progress is by "stepping out into the unknown," but told jurors he assumed there was "proper research done by DePuy."
"I think that in a way the patients were guinea pigs," Dr. Huddleston told Eyewitness News in an interview.
Dr. Huddleston told jurors that even he, as an orthopedic surgeon, did not know that implants "cleared" by the FDA through the 510(k) process had not necessarily been tested in humans.
"The bone and soft tissues around the hip start to look like pieces of cheese... except pitch black pieces of cheese," Dr. Huddleston told Eyewitness News of what he's seen inside some of his patients with metal-on-metal hips.
"Sometimes we get in there and it looks like it's filled with old oil that you've drained from your car," Huddleston said.
WARNINGS IGNORED? "RARE," BUT POTENTIALLY "EARLY" AND "CATASTROPHIC" COMPLICATIONS
Lanier argued at trial that DePuy knew all along that all metal-on-metal implants were potentially dangerous - and showed jurors how concern grew over the years - even among DePuy's own experts and highly-paid design surgeons.
In 1995, DePuy's then head of hip development, Dr. Graham Isaac, warned in a 1995 report titled "The End Game" that testing showed a "sudden catastrophic breakdown" of some rival company's metal implants, leading to a "large volume of wear debris."
By 2004, Lanier argued that DePuy knew from its own investigation in the U.K. of the "Ultima," another DePuy all-metal hip implant that, "metal ions released have killed the bone and soft tissue around the hip."
In 2010, one of DePuy's own Pinnacle design surgeons, Dr. John F. Irving, wrote an email to DePuy marketing executive Paul Berman expressing disappointment at the company's "head in the sand response" to problems with metal-on-metal hips.
"I believe it borders on unethical to continue to market the product until the issues are elucidated. These products are harming patients," Irving wrote in the email shown to jurors.
Also in 2010, Dr. Andy Engh, another Pinnacle hip design surgeon DePuy had paid millions of dollars in royalties, warned of complications that "although rare" can be "early" and "catastrophic."
"Some of these key doctors said to the company, you have a problem with Pinnacle metal-on-metal," Lanier told Eyewitness News.
"Internally, within that closest network of doctors who are actually getting a cut out of the sale of those products... those doctors themselves quit using it," said Lanier.
One of those highly paid DePuy Pinnacle design surgeons, Dr. Thomas Fehring, even went so far as to say that doctors were "seduced" into using metal-on-metal implants - asking in a 2011 PowerPoint if the problems surgeons were seeing were just the tip of the iceberg.
Lanier also showed jurors a DePuy PowerPoint that detailed a "Complaint Crisis" the company faced in 2008. More and more patients were undergoing "revisions" - a painful surgery to remove and replace failed hip implants.
One option pitched to company executives by a DePuy employee?
"Let's train our sales force not to report the revisions," Lanier says reading from the DePuy PowerPoint. "And if our sales force will not report the revisions, it will make us look better with the FDA, it'll make us look better compared to our competition."
DePuy executives testified at trial that option was not selected and not taken seriously.
CANCER AND CARDIAC TOXICITY FEARS
Lanier argued at trial that cancer is a potential risk - and showed jurors a recent government report that found cobalt ions are "reasonably anticipated to be a human carcinogen" based on studies in animals. That 2016 report by the U.S. Department of Health and Human Services notes that exposure to cobalt is often seen in patients with "failed hip implants."
It's a very real fear for patients like Angie Rodriguez. A blood test in 2012 before her Pinnacle Ultamet metal-on-metal hip implants were removed showed that her cobalt levels were six times what's considered normal. After her revision surgery in 2013, Angie's cobalt levels plunged.
"We were told it settles in all the major organs, so we don't know what that's going to do in the long run down the road and it's scary," Angie tells Eyewitness News.
Surgeons with the famed Mayo Clinic documented the 2014 death of a Minnesota woman who had two Pinnacle Ultamet metal-on-metal hip implants. The 64-year old woman described "increasing hip pain" and later shortness of breath. Her cobalt levels were "markedly elevated" at 192 parts per billion and she was transferred to Mayo in critical condition. Surgeons removed the metal hip implants and scooped out what they described as damaged, stained tissue -- but she died days later.
Her cause of death? Heart failure secondary to cobalt toxicity. A wrongful death lawsuit against DePuy and Johnson & Johnson is pending.
DEPUY'S "BILLION DOLLAR BABY" LEADS TO BILLION DOLLAR VERDICT
DePuy and Johnson & Johnson declined ABC7's repeated requests for an interview, but argued in court that all types of implants can fail, and that all implants - even those made with plastic or ceramic - can shed debris into the body. DePuy says innovation requires some risk and that doctors were warned about the potential risks of these implants and chose to use them based on the needs of their patients.
In a statement to ABC7 Eyewitness News, a DePuy spokesperson wrote that the company "acted appropriately and responsibly in the design and testing of the product" and claims a "strong track record of clinical data."
DePuy argued at trial that the metal-on-metal hip implants failed in Angie and the other California plaintiffs for reasons unrelated to any possible design defect - pointing to possibilities like metal hypersensitivity, infection and implant components that may have been inserted at the wrong angle.
But the jury disagreed and delivered their headline-making verdict after less than one day of deliberations.
"If your viewers or you or I break the law or do something wrong, we'd get thrown in jail," Lanier told Eyewitness News. "But you can't throw Johnson & Johnson in jail."
In closing arguments, Lanier reminded jurors that in 2007 DePuy, without admitting to any wrongdoing, shelled out $84.7 million to avoid criminal prosecution for those alleged kickbacks to "induce" orthopedic surgeons to use only DePuy products.
Lanier did not suggest a dollar amount for potential punitive damages, but urged jurors to use what he called "DePuy Dollars." He told the jury, "This is a company that has no qualms spending $30 million on Dr. Schmalzried." Consider their net worth -- $687 million for DePuy and $72.7 billion for its parent company Johnson & Johnson.
"A company worth $72 billion, they'll spend $84 million on a headache, that's aspirin money to them," said Lanier of his argument to the jury.
"So, our jury awarded an aspirin to each of the plaintiffs in our case -- $84 million apiece for punitive damages," said Lanier.
That money is likely to be tied up for years to come as the two sides fight it out in appeals court, but Angie Rodriguez says she and her fellow California plaintiffs feel a sense of vindication.
"We stood up for what we believed in... we stood up for ourselves," Angie told Eyewitness News.
Got a tip? Email ABC7 Investigative Producer Lisa.Bartley@abc.com
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