Tiger Buford and others discuss how Exactech's packaging recalls spiraled into a class-action lawsuit that tanked the company's value from $700 million to $85 million. The real damage came from a false reassurance letter about shoulder polyethylene, not the defect itself. The episode traces how cover-ups trigger legal cascades and compares it to DePuy's metal-on-metal hip scandal.
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The Actec one is fascinating.
I mean, does everybody know what happened there? I mean, they— I'll tell you what I know, which is very little. They had chronic packaging recalls and they had so many that it turned into a class action lawsuit. And the litigators, you know, the ambulance chasers kind of went after the company. And, you know, the private equity group that bought them for $700 something million, and now the company's worth very little, and some of the insiders are buying the company for $85 million. And remains to be seen what's going to come out the other side.
I never dug deep into it, but I remember there being a couple of things maybe 18 months or 2 years ago where they were, they were dancing around a proper field action. You know, so there was issues related to their packaging. It was leading to some parts being bad, and they pulled some parts back, but then they sent a letter out and told everybody that all their shoulder polyethylene was fine. And then part of that turned out to be wrong. And I think what ended up happening was, because my suspicion is that they tried to minimize the damage, but it just simply put more spotlight on them, and they didn't solve the problem, or they didn't figure out what the problem was properly, and then didn't address it aggressively because they were trying to bury their head in the sand. And we've seen that sort of thing in the past. And then once blood is in the water, I mean, I was at, I was at DePuy Synthes when the metal metal thing took off, and it became an absolute feeding frenzy for the sharks to where essentially lawyers were convincing patients to go to their surgeon and convince them to take out perfectly good functioning hips and revise them so that they could then join a metal metal class action lawsuit. And I imagine that some sort of terrible cascade probably took place with Exactech product too.
Yeah, it's, it's usually, it's usually not the issue, it's the coverup that gets companies in trouble.
Yeah.
Yeah. That's a good way of saying it. When, when the, uh, lawyers smell blood, it's kind of all over.
Well, I was, I was just gonna bring in to, to the effect of the, uh, the Exactech. Um, when I, in 1998, Pfizer launched a drug that was a great broad-spectrum antibiotic that we were selling. And, uh, I mean, they, they'd done more research on it. They had something like 15,000 people in clinical trials, phase 3 clinical trials, which was at the time almost unprecedented, the amount of people that had it. And they still did not pick up on a signal that certain patients who were on this antibiotic at certain time like, I mean, would actually die from it.
