Friday, October 08, 1999
$4.83B fen-phen deal proposed
Drug-maker to pay for injuries and checkups
BY BEN L. KAUFMAN and SUSAN VELA
The Cincinnati Enquirer
American Home Products Corp. agreed Thursday to pay up to $4.83 billion to settle a national class-action suit blaming its fen-phen diet drug for heart valve damage.
The settlement, in one of the biggest product liability cases ever, covers thousands of lawsuits filed nationwide and any of the roughly 6 million people who took the now-recalled drugs, whether or not they sued.
If a judge approves the settlement, people with serious health problems blamed on fen-phen will get as much as $1.5 million each. Healthy former users will be able to get such benefits as $30 prescription refunds and free checkups. Payments will begin this year and continue for about 16 years.
We're very pleased, said Cincinnati lawyer Stanley Chesley, co-chairman of the 11 lawyers representing fen-phen users. This proposed agreement provides the types of benefits most needed and desired by class members, including medical testing and medical monitoring.
Mr. Chesley estimated that about 100,000 people in the Tristate took the drug. One of those people was Stephanie Brooks, of Fort Thomas, who sued American Home about two years ago.
Ms. Brooks, 32, who said her seven-month, on-and-off use caused heart valve damage, was pleased with the settlement.
The thing that I like about it is that if anything happens (in the next 15 years), I'm still covered, she said.
Under the settlement, American Home will put $3.75 billion aside. With interest, the total amount could be $4.83 billion, easily surpassing such other large product liability settlements as Dow Corning's $3.2 billion payment to women with silicone breast implants.
The settlement offers peace of mind to those who used the drugs and permits the company to move beyond the uncertainty and distractions of litigation, said John R. Stafford, American Home's chairman, chief executive and president.
American Home, which also sells the pain reliever Advil and
Robitussin cough medicine, made fenfluramine and dexfenfluramine, the fen in the fen-phen combination, and sold it as Pondimin and Redux, respectively. It also made phen, or phentermine.
In 1997, the Food and Drug Administration persuaded the company to stop selling the drug combination after a Mayo Clinic study linked fen-phen to potentially fatal heart valve damage. Phentermine was never linked to any illnesses when taken alone and remains on the market.
Louis L. Hoynes, American Home's general counsel, reiterated the company's position that the drugs were safe for most people.
The scientific studies conducted to date and clinical experience indicate that the health of the overwhelming majority of people who took Redux or Pondimin has not been adversely affected, he said.
In Covington, Rick Pearl, owner of Riverfront Diet Clinic, and Fortune Williams, its on-staff doctor, were hoping for a different ending to the class-action suit.
The clinic once prescribed fen-phen and many patients there say they would like to use it again, de spite the reports of dangerous side effects.
I'm very surprised, Mr. Pearl said. This has become more of a legal issue than a medical issue.
Mr. Pearl and Dr. Williams pointed to an Oct. 1 New York Times article that reported a recent study that failed to find a correlation between fen-phen and severe heart damage. However, the Times also reported that other scientists said the study was small and inconclusive.
In 1996, Riverfront had enrolled about 2,200 people in its fen-phen program. Most were from Ohio. People from surrounding states flocked to Kentucky because of the drug's availability.
Tennessee had banned it, Ohio allowed prescriptions for 12 weeks and Indiana had a 30-day restriction.
David Helmers, a Lexington lawyer who has been pursuing another class-action suit in Boone Circuit Court, said he wanted to see the national settlement before suggesting that Kentuckians participate.
He represents up to 50,000 people who were prescribed fen-phen at Bariatrics Inc. clinics in Florence, Ashland, Lexington and Louisville.
One of the good things about it is that it allows individuals to opt out and pursue their case, Mr. Helmers said. The good thing about this settlement is that for a large number of consumers, this is going to provide some closure.
American Home said it faces about 6,500 suits over the drugs. Individuals can opt out of the settlement and still sue. However, if American Home believes too many people have refused to participate, it can terminate the deal.
In the only verdict in any fen-phen lawsuit, a jury awarded a 36-year-old Texas woman $23.3 million in July for heart damage she claimed to have suffered after taking fen-phen for more than three months. Last month the company settled for about $2 million, her attorney Kip Petroff said.
Under the settlement, she would have received only about $21,000, Petroff said. He represents about 150 other fen-phen clients and is advising them not to participate in the settlement.
The settlement does not cover patients who say they suffer from primary pulmonary hypertension, a rare but serious lung disorder. The company said it decided to deal with those cases separately because there are so few of them. It also noted that fen-phen's label included a warning that the drug could cause the disorder.
The settlement contains $2.32 billion to pay for injuries, $1 billion for medical monitoring and drug refunds, and $429 million in plaintiffs' attorney fees. The company has also agreed to pay $25 million for heart disease research.
In 1989, A.H. Robins Co. agreed to set up a $2.5 billion trust fund to settle claims over the Dalkon Shield intrauterine device. Robins was later taken over by American Home.
On news of the settlement, the stock of American Home, based in Madison, N.J., rose $3.50 to $48.621/2 on the New York Stock Exchange. The company had revenue of about $13 billion last year and profits of $2.5 billion.
Details of the proposed settlement are available at (800) 386-2070.
The Associated Press contributed to this report.
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