Hip product recall costs add to €3.45bn losses at Irish arm of DePuy

Cork based company recorded losses as revenues dipped by 4% to €1.29bn

In Ireland, about 3,300 patients received these implants, across 16 public and 14 private hospital sites nationwide.

In Ireland, about 3,300 patients received these implants, across 16 public and 14 private hospital sites nationwide.

 

The main Irish arm of orthopaedic medical device manufacturer DePuy recorded pre-tax losses of €3.45 billion in 2018.

New accounts for DePuy Ireland Unlimited show that a €1 billion provision for a hip replacement product recall and associated costs contributed to the substantial losses. It followed a pre-tax profit of €107 million in 2017.

The company – which is owned by Johnson & Johnson – employs 837 at its Cork base and revenues in 2018 declined by 4 per cent to €1.292 billion.

In August 2010, DePuy Ireland Unlimited announced a world-wide voluntary recall of certain products used in hip replacement surgery.

In Ireland, about 3,300 patients received these implants, across 16 public and 14 private hospital sites nationwide.

Total provision

The directors state that the total provision for the global recall at the end of 2018 amounted to €1.29 billion for DePuy Ireland Unlimited and followed a provision of €492 million at the end of 2017.

Along with the €1 billion product recall provision, a €2.66 billion impairment by DePuy Ireland Unlimited in subsidiaries resulted in the pre-tax loss in 2018.

A note attached to the accounts state that the impairment occurred “due to an impairment indicator noted due to the commissioning of an independent valuation report on underlying financial assets”.

Staff costs at the DePuy Cork company declined by 3.6 per cent to €75.3 million.