The hip replacement recall by Johnson & Johnson subsidiary DePuy Orthopaedics has everyone making armchair estimates of all the money involved. The company will have to burn a lot of dough in legal fees and settlement claims with implant recipients, and general approximation places the amount somewhere between $1 billion and $5 billion—maybe even more. But how much does this current hip replacement recall—and also defective products in general—cost their manufacturers in terms of bottom line and market value?

According to its latest financial performance: not so much.

Such are the kinds of questions economic and marketing pundits are currently toying with. For one thing, Johnson and Johnson is a huge, highly respected organization with immense global resources. Its extensive market reach served it well in the past. Despite its research muscle, however, its “high end” artificial hip implants still ended up with defects that left recipients literally screaming in physical and emotional pain. So how could somebody so huge like J & J botch this up so badly?

Of course, another important aspect of this issue that the public is closely watching is how the company will conduct its “damage control.” How will it answer to each and every lawsuit, both in the US and abroad? But while the total cost of the hip replacement recalls maybe in the clear billions, the very fact that a company like Johnson and Johnson made a product that caused pain and suffering among thousands of people is something that will linger in the public’s mind. The matter of defective hip replacements has a significant negative impact on the brand image of the manufacturer. We deal with an exceedingly complicated matter that perhaps one cannot fully measure or put an actual, accurate number on the loss of credibility. If you were a patient who suffered so much and went through incredible pain with Johnson & Johnson’s DePuy ASR hip replacement system, you would probably be screaming your lungs out the next time some doctor mentions you the name “Johnson & Johnson.” Multiply that situation to thousands and thousands of traumatized patients, who will be speaking of their “nightmare” with friends, relatives and lovers, and you get the big picture. A huge, established corporation like Johnson & Johnson can still probably save its image by launching a long-term and expensive marketing and advertisement campaign, but the smaller companies may not be so lucky and resilient.

Further, aside from loss of credibility (if you are in the business of medical cures or devices, you know that credibility is everything), the company’s market value will also depreciate. In fact, the damage to its reputation has already caused Johnson & Johnson a sales decline of about 8.5% in its domestic health products.

Despite this depreciation, however, the company seems to be emerging largely unscathed from the issue. In fact, based on the company’s overall financial performance in this quarter, Johnson & Johnson has not been derailed from its original year-long financial projections, despite the hip replacement recall. And with its “innovative” way of dealing with the recall—by outsourcing the legal and medical services needed to analyze every patient’s claim—it may even end up “profiting” from the whole mess.