Lawsuits are a way of life for any health-care company, a reality that's particularly evident in the medical-devices sector. For an example, you don't need to look any further than the orthopedic segment of the industry, which has been plagued in recent years by recalls of metal hip replacement components. From Zimmer's (NYSE: ZMH) recall of it's Durom Cup in 2008 to last year's announcements from Smith & Nephew (NYSE: SNN) and Stryker (NYSE: SYK), it seems as if none of these companies was able to create technology that actually worked for patients.
But how can this be? Isn't the FDA supposed to make sure this type of thing doesn't happen? In the following video, Brenton Flynn walks through recent news from the highest-profile recall of them all, Johnson & Johnson (NYSE: JNJ), and explains a key reason we've so many faulty hips implanted in patients over the years.