Exactech, a medical device company headquartered in Gainesville, Florida, has filed for bankruptcy protection amid ongoing legal battles. The company faces more than 2,000 lawsuits in both state and federal courts from patients who claim they received defective hip and knee implants. To address its financial strain, Exactech announced a plan to restructure its operations and sell its assets to a private investor group comprising private equity and alternative asset firms. This move would provide approximately $85 million in new financing to keep the company operational during the restructuring process.
Darin Johnson, Exactech’s president and CEO, explained that the financial liabilities stemming from lawsuits over its hip and knee products became unsustainable. He noted that these lawsuits largely relate to voluntary recalls initiated between 2021 and 2022 due to packaging issues. Despite the bankruptcy proceedings, the company intends to continue operating.
The bankruptcy filing, processed in a Delaware federal court, will halt ongoing litigation, including the cases scheduled to go to trial soon. This unexpected development has disappointed attorneys representing injured patients who anticipated that one of the first jury trials against Exactech would begin in December in Alachua County, Florida. Lawyer Andrew Saunders criticized the bankruptcy move, claiming it obstructs the public trial and obscures accountability for the company’s alleged misconduct.
Over the past 30 years, Exactech has evolved from a small-scale medical device manufacturer to a global corporation. However, recent investigative findings by KFF Health News, published in October 2023, highlighted the company’s delays in reporting adverse events to federal regulators, as required by law. This investigation revealed that Exactech had failed to report hundreds of issues in a timely manner to a national database monitoring medical device performance and safety.
A significant number of lawsuits claim that Exactech’s knee and hip implants suffered from high failure and complication rates, often requiring patients to undergo revision surgeries much earlier than expected. Exactech, while refuting these allegations, has issued multiple recalls since August 2021, affecting its artificial knee, hip, and ankle products. The initial recall cited packaging problems dating back as far as 2004, which allegedly caused premature degradation of a plastic component in approximately 140,000 implants. A review of 300 ongoing cases in Alachua County showed that, in many instances, the implants failed within seven years—well short of the typical 15-20 year lifespan expected for these devices.
The outcome of Exactech’s restructuring and its impact on the pending cases will be closely watched by affected patients and the medical device industry.