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Endo/AMS Puts Aside $520 Million for Mesh Litigation

Defective Medical Devices

Even if you eventually win, being involved in transvaginal mesh litigation is an expensive proposition, so Endo Health Solutions has put aside at least $520 million to prepare for any outcome.

vaginal sling before it's neededEndo purchased American Medical Systems (AMS) in 2011 for $2.9 billion and in doing so acquired the AMS product liability issues concerning defective transvaginal meshes to treat stress urinary incontinence (SUI), and pelvic organ prolapse (POP).

The medical device company is facing 16,317 transvaginal mesh lawsuits consolidated in one federal court alone. The company says when you include state court actions it is currently facing approximately 22,000 product liability cases.

More cases are expected to be filed added to the Southern District of West Virginia federal court under a tolling agreement order that overlooks any statute of limitation.

AMS says 850,000 units of the AMS sling have been sold worldwide, that includes the Monarc Subfascial Hammock and the SPARC Self-Fixating Sling System. Endo/AMS also makes the Apogee, Perigee and Elevate, among other mesh slings and pelvic organ repair mesh devices.

Win, lose or draw, legal fees, paying for travel, discovery, depositions, hiring experts at $500 an hour runs into big bucks. The money set aside to cover whatever eventuality comes from a pretax charge last year of $316 million reports Fierce Medical Devices.

Endo/AMS says it plans to “contest vigorously all currently pending cases and any future cases that may be brought.” Despite those words, last year the company disclosed it would pay $54.5 million to resolve an unnamed number of pending transvaginal mesh injury cases filed by women who claimed the AMS products eroded and left them in chronic pain with a return of incontinence.

According to the company’s Securities and Exchange Commission (SEC) 8-k filing, just released this week, the company is also facing lawsuits from Canadian litigants.

“The Company believes that certain settlements and judgments as well as legal defense costs, relating to product liability matters are or may be covered in whole or in part under its product liability insurance policies with a limited number of insurance carriers.”

However, in certain circumstances an insurance carrier may contest or deny coverage.

Let’s not forget that AMS/Endo is still required by the Food and Drug Administration to conduct post-approval studies on how well their products are doing in women who have already been implanted.

AMS received 19 such orders from the FDA in January 2012 but after some wrangling, the FDA agreed to put a hold on 16 of those studies. That means three of the post-market inquiries are still alive and should be released sometime next year, provided the company did what the FDA ordered.

In addition, there are a number of investigations under way, according to the SEC filing, including one by the California state attorney general as well as other states. In November 2013, AMS/Endo received a subpoena to turn over documents concerning transvaginal surgical mesh used to treat pelvic organ prolapse (POP) and stress urinary incontinence (SUI). The outcome of that investigation could result in penalties or fines if it is determined that the state paid for surgeries that involved a defective product.

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