January 1997 Bulletin

Two firms take different roads in pedicle suits

Two major manufacturers of orthopaedic devices are taking different roads in the huge litigation involving the use of pedicle screws.

Sofamor Danek Group Inc. has vowed to fight the suits filed against the manufacturer and will take a pre-tax charge of approximately $50 million which the company estimates will be the cost to defend itself. AcroMed Corp. has offered $100 million to settle the cases in which it is a defendant.

On Jan. 6, Sofamor Danek announced that its upcoming 1996 financial results will include the charge. James J. Gallogly, president and chief operating officer, said, "we believe this charge will allow our future financial results to reflect clearly the financial health of our business." Sofamor Danek reported nine-month net income of $31.8 million for 1996, compared with a nine-month loss of $4.8 million a year earlier.

Sofamor Danek is a defendant in approximately 2,800 individual lawsuits. Many other manufacturers of internal fixation devices also have been sued by patients who have undergone spinal fusion surgery in which screws which they manufactured have been utilized.

The Academy and several other medical specialty associations also have been named in some of the suits.

A month earlier, AcroMed Corp. announced that it had entered into an understanding to resolve all product liability claims involving the use of its Variable Screw Placement bone screws.

AcroMed said the claims against the company were without merit. Arthur Steffee, MD, founder of the company, said, "I have seen over time how the lawsuits have interfered with the process of continuing medical education and delivering the highest quality medical care to spine patients in this country. I have reluctantly concluded that the pursuit of these vitally important goals requires resolution of the pending litigation."


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