Stryker’s Attempt At Full Transparency Appears to be No More Than Lip Service

On July 18, 2012, Stryker “suits” conducted their second quarter investor conference call. These calls provide financial advisors open access to the team Stryker handpicks to talk to the financial industry. It’s the company’s opportunity to huff and puff about all the great things they have done and, in this case, to dismiss, distract and dissemble about Stryker’s worldwide recall of one of its latest, greatest hip implant systems.

I’m not sure who Katherine Owen is (Vice President of Strategy and Investor Relations) but she’s really good at her job. Two weeks ago, Stryker abruptly recalled its Rejuvenate and ABG II hip implants. It’s easy to recall devices that are sitting on shelves but, a little problematic for the 30,000 implanted in patients’ hips. These devices had only been on the market for a short while. For the unwashed masses, yanking a product off the market after only a couple of years would be a humbling, potentially costly event. Not only does the company lose sales generated by the product, but they also face the ensuing litigation. You would expect this call with financial analysts to be tense. Not for Ms. Owen and Stryker.

As analysts poked and prodded for answers about how this would impact Stryker’s performance in the market and what Stryker’s potential liability was: Ms. Owen held firm. First, she claimed that this hip device was only experiencing a .5% failure rate. That’s less than one percent! Most device manufacturers would do back flips if their devices only failed once in two hundred cases.  C’mon Ms. Owen, if that were true, why would Stryker put the kibosh on the only modular hip implant device in its entire line?  Half of one percent…right?

If Ms. Owen is not spinning yarn, only 150 Rejuvenate and ABG II hip implants out of 30,000 have failed, and yet Stryker was willing to endure the ultimate humiliation of initiating a worldwide recall of the device. That just doesn’t pass the smell test. Reminds me of college days when my roommate would say, “Does this chicken smell okay? It’s only a couple of days expired!”  

In contrast to Ms. Owen, I don’t work in Stryker’s national headquarters nor do I draw a paycheck from Stryker. She should spend a week in my office talking to Rejuvenate victims for hours on end, or spend an afternoon in the offices of one of the orthopedic surgeons who trusted Stryker and its modular products and now spend each day telling more and more patients that their implant has failed after only a few months and that they will have to undergo yet another painful surgery and prolonged rehabilitation.  She should hear the stories about how the original surgery cost the patient thousands of dollars out of their own pocket and now they face a second, more expensive surgery. To date, unlike DePuy, Stryker has not set up a readily accessible program to pay for the required revision surgery and incidental expenses.  It is the least that Stryker could do, given the devastation caused by the Rejuvenate. Instead, all these poor folks are being told is to “submit a claim” and Stryker will get back with you.

It also might be important for Ms. Owen to hear about the dislocations, pain and fear these patients face at the prospect of having to undergo another hip surgery. She might change her tune if she listened to the story I heard today from a woman whose femur fractured during her revision surgery five weeks ago. Last week, her femur fractured yet again and her hip dislocated; this latest dislocation actually happened in my office.  My staff and I had to wheel her to her car in a secretarial chair so that she could be rushed to the hospital.  She has undergone another revision surgery, this time by a trauma surgeon and now she is in inpatient rehabilitation for 8 weeks. To use one of Ms. Owen’s favorite phrases, this woman faces a “significant headwind.”

When asked by an analyst whether this recall would hurt Stryker, she blew him off saying that Stryker considers this such a small issue that they have not even taken charge to prepare for the eventual fall out. Not once during the call did any Stryker representative mention their customers – the victims of this failed, defective and now recalled device.   If you asked any of my Stryker Rejuvenate clients, I suspect that none of them would consider the recall and the suffering that they have experienced to be a small matter.  I suspect that juries will, likewise, consider Stryker’s recall and the decision to market the defective Rejuvenate hip implant as anything but insignificant and award considerable comparative and punitive damages to the victims of Stryker Rejuvenate hip implants. 

Ms. Owen is in corporate. As the title suggests, she’s in charge of “strategy.” She NEVER ONCE mentioned the patients that are the victims of this defective, recalled product. Instead, she emphasized how this recall would not affect profits and how Stryker intended to simply shift its focus to other products in its implant line.

This is an example of why I love my job. Drug and pharmaceutical companies care about one thing. Money. They don’t give a rat’s behind about their customers. They fling a new device or drug on the market without a care in the world if it will hurt people. All they care about is rushing the product to market and establishing market share. If it fails, who cares? Most are multi-billion dollar companies. They’ll hire an army of lawyers to clean up the mess and move on to the next newer, better mousetrap.  

Unfortunately, in addition to suffering the physical harm caused by this failed, recalled device, patients seem destined to attempt to hold Stryker accountable in the court system.