Court upholds fen-phen
diet drug settlement
MADISON,
N.J., Aug 16 (Reuters) - American Home Products Corp. on
Thursday said the U.S. Court of Appeals affirmed the drug maker's
settlement over the diet drugs Redux and Pondimin, best known as
fen-phen.
"We
are pleased that the Court of Appeals has rejected these challenges
to our diet drug settlement," American Home Products President
and Chief Executive Robert Essner said in a statement. "This is
an important step in putting this matter behind us."
Barring
any appeals to the United States Supreme Court, the settlement will
by its terms become final by the end of the year. American Home
Products had previously taken charges of $12.25 billion related to
the settlement and will have paid out $11 billion of that by the end
of 2001.
American
Home Products recalled the diet drugs, which were used by 6 million
Americans, in 1997 after their use was linked to damage to heart
valves.
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Deaths, Lawsuits on Rise as
Fen-Phen Withdrawal Approaches 4-Year Anniversary
Cases Against Diet Drug
Manufacturer Could Double, Says Leading Pharmaceutical
Attorney Michael Hackard
SACRAMENTO,
Sept. 10, 2001 /PRNewswire/ -- Two wrongful death complaints
filed today in California could signal a renewed wave of
lawsuits against American Home Products just as the
pharmaceutical company coaxes investors back with
predictions that its legal troubles over Fen-Phen/Redux are
coming to an end.
The
lawsuits were filed just days before the anniversary of Fen-Phen's
removal from the U.S. market on Sept. 15, 1997. Since then,
more than $11 billion has been distributed to victims of the
drug or their families. That figure could easily double as
more former users of Fen-Phen/Redux are diagnosed with
either heart valve damage or primary pulmonary
hypertension, commonly called PPH, said attorney Michael
Hackard of Sacramento, a leading attorney in Fen-Phen/Redux
cases.
"As much
as American Home wants to sweep Fen-Phen/Redux under the
carpet, the devastation caused by this drug is about to
reach epidemic levels as the effects of heart and lung
damage caused by Fen-Phen become apparent to hundreds of
thousands of former patients," Hackard said. "This
company must be held responsible
for marketing a
drug they knew could hurt and even kill people."
Hackard
represents the surviving families of Donald Holmes of San
Juan Bautista, who died last November at age 63, and Yolanda
Gallegos of Downey, who died three weeks ago at age 55. Both
died of PPH resulting from their ingestion of
Fen-Phen/Redux to lose weight. The Holmes lawsuit was filed
in San Benito County Superior Court, and the Gallegos case
was filed in Los Angeles County Superior Court.
In the
United States, between 6 million and 7 million people took
Fen-Phen/Redux. As the diet pills' popularity soared,
doctors started connecting the use of the drug with heart
valve damage and PPH, which shrinks and hardens blood
vessels in the lungs. Those findings resulted in the U.S.
Food and Drug Administration pressuring American Home to
withdraw Fen- Phen/Redux from the market.
A Boston
University School of Medicine study charted the heart valve
defect rate caused by Fen-Phen/Redux at 28 percent. That
means almost 2 million former users have heart valve damage.
So far, fewer than 500,000 users have received compensation
from lawsuits.
A recent surge
in diagnosed cases of primary pulmonary hypertension would
echoearlier findings by French doctors on a nearly identical
diet drug called Aminorex used in Europe during the 1960s.
That study outlined a roughly 4-to-6-year interval between
Aminorex use and the onset of an epidemic in cases of PPH,
which continued into the 1970s, years after the European
authorities pulled Aminorex from the market.
"Even though it's been four years since Fen-Phen/Redux
was pulled from the market, many users are just now being
diagnosed with valve problems or PPH," Hackard said.
"We hope this information will help save lives as
former users seek exams from their doctors."
Before the
advent of Fen-Phen/Redux and other appetite suppressants,
PPH was rare, with one or two cases reported among 1
million people in a year. That same number is now 23 to 46
new cases among 1 million people a year, according to
medical journals.
"Although
this incidence is still relatively low, it represents a
significant increase over the background incidence of a
potentially lethal disease," stated an article in the
medical journal Chest, published by the American College of
Chest Physicians. American Home Products settled 375,000
cases through a $3.7 billion class-action suit. But
claims continued to mount, and the company agreed to settle
75,000 more cases. Hackard added that American
Home is throwing complicated legal delays into new
cases as a deliberate attempt to wait until patients die,
because wrongful death suits are less expensive for the drug
company to settle than cases pursued by living
plaintiffs.
"American
Home Products' market capitalization is more than $75
billion. They've already set aside close to 16 percent of
that market capitalization to pay for their wrongdoing. By
the time this is over, they may have to add another 16
percent," Hackard said. "In the meantime, they're
literally running the clock on people's lives. It takes
corporate cynicism to new depths."
AHP profits decline . . .
continued from
col. 3
BIGGEST STABLE OF NEW DRUGS
In the past two years, AHP has brought to
market more new medicines than any other major U.S.
drugmaker, including the pneumococcal vaccine Prevnar, ulcer
drug Protonix, hemophilia treatment ReFacto, Rapamune to
stop rejection of kidney transplants, and sleeping aid
Sonata.
Company revenues in the third quarter
edged up about 5 percent to $3.74 billion, boosted by
Protonix, whose sales jumped 618 percent to $162 million,
and antidepressant Effexor XR, which posted a 24 percent
jump in sales to $403 million.
The company said its worldwide sales of
pharmaceuticals rose 9 percent to $2.9 billion.
Its consumer health-care unit, which
sells products such as Centrum vitamins and Advil
painkiller, saw sales slide 3 percent to $626 million. The
company's animal-health products business saw sales jump 12
percent in the period to $205 million.
AHP closed down $1.40 to $58.90, or 2.3
percent, on the New York Stock Exchange Tuesday, and is down
7 percent since the start of the year compared with a 12
percent decline in the American Stock Exchange
Pharmaceutical Index (^DRG
- news) of
large drug firms over the same period.
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Leflaw's Fen
Phen E-sources
Private Webchat
with
Dispensing
with the Truth author Alicia Mundy
on Friday Sept. 7 @ 3:00 EST
at www.reduxclassaction.com
email
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for details and a password
Plaintiff Lawyers Say
More Fen-Phen Cases Are On The Way
Law firms are
girding for another wave of diet drug litigation, although
they disagree on how big it will be.
Some attorneys
believe the bulk of the cases will come with final approval
of the national settlement, when intermediate opt outs have
the option of filing cases. Other firms are advertising
aggressively for new clients. Lawyers cite the numbers: of 6
million former diet drug users, as many as 2 million may
have been injured, while fewer than 500,000 have been
compensated in settlements with American Home
Products. Some of the new cases involve primary
pulmonary hypertension (PPH), a fatal disease in which the
blood vessels in the lungs narrow and raise the pulmonary
blood pressure. PPH is not covered by the national
settlement, and cases may be brought at any time.
Holmes Case
Two such cases
have been filed in California by attorney Michael A. Hackard
of Hackard & Holt, including Donna Holmes, et al. v.
American Home Products, et al.(J.C.C.P. No. 4032, No.
0127398, Calif. Super., San Benito Co.). The action was
brought by survivors of Donald Holmes Sr., who died Nov. 29,
2000, of PPH, according to the complaint.
The
complaint also names as defendants a physician, Wal-Mart,
pharmacists and John Does and incorporates the master
complaint filed in the Los Angeles County Superior
Court. Hackard opined on the PR Newswire that the next
wave of diet drug litigation could equal the first round in
its cost to AHP. Other attorneys are doubtful. PPH is so
rare even among former diet drug users that one plaintiff
attorney with several PPH cases doubted more than a few
dozen would emerge in a given year. Although AHP has
settled with most of the initial opt outs, attorneys say a
few are still awaiting trial or settlement. But several
attorneys agree that the bulk of new cases will be the
thousands of potential intermediate opt outs currently being
signed up by law firms, former users who had an FDA-positive
echocardiogram
after
September 1999.
‘Wild
Guess’
One
attorney involved in diet drug litigation said a "wild
guess" would place the number of former diet drug users
eligible at around 10,000 but because those cases have given
up the right to seek punitive damages, some attorneys think
they’re a bad bet.
Other firms are
actively pursuing new heart valve cases in which people with
few or no symptoms put off being tested. Lawyers monitoring
the television advertising of several Utah firms say the
firms appear to have spent tens of thousands of dollars
looking for new clients and claim in published articles that
the public is responding.
AHP profits decline as firm takes diet drug
charge
By Ransdell Pierson and Edward Tobin
NEW YORK, Oct 23 (Reuters) - U.S.
drugmaker American Home Products Corp. (NYSE:AHP
- news) on
Tuesday said third-quarter earnings declined despite higher
sales of key drugs as the firm took a $950 million charge
for continuing liabilities to former users of its diet
drugs.
AHP, maker of the Redux and Pondimin
appetite suppressants that were withdrawn from the market in
1997, posted earnings of $252 million, or 19 cents per
share, compared with $762 million, or 58 cents per share, a
year earlier.
The firm has reached a national
settlement with former users of the diet drugs, which the
company hopes to become final next year unless the deal is
appealed to the United States Supreme Court and ruled
invalid.
Robert Essner, AHP's chief executive
officer, said in a statement the quarterly results, which
include the fen-phen charge, represent ``further efforts to
put the diet drug litigation behind us.''
AHP had already taken $12.25 billion in
charges in the past two years to compensate former users of
its diet drugs once included in the ``fen-phen'' slimming
cocktail. The prescription medicines were yanked from
drugstores after being linked to heart valve damage and
other health problems.
The company on Tuesday said it did not
expect to take any more such fen-phen charges, a forecast it
has made in the past and failed to live up to.
Deutsche Banc Alex. Brown analyst Barbara
Ryan called the latest charges ``a disturbing and surprising
turn of events.''
``We hope this is the end to this sad
saga,'' she said, adding that fewer than 600 fen-phen cases
remain to be settled by AHP from among 6 million past users
of the diet drugs.
The company reported earnings before
charges of $867 million, or 65 cents per share, up from $762
million, or 58 cents per share, a year earlier.
Analysts surveyed by research firm
Thomson Financial/First Call had expected earnings of 62
cents to 64 cents a share, which was the forecast the
company had given in July. The average estimate was 63 cents
per share.
AHP told analysts in a conference call it
expected 2001 earnings per share of $2.17 to $2.19, in line
with the 15 percent First Call earnings growth forecast for
this year.
It projected ``mid teens'' percentage
earnings growth next year, of $2.55 to $2.65 per share, a
forecast that incorporates a mandated change in accounting
practices.
``We remain confident that we are on
track to realize our short and longer term growth targets,''
Essner said.
continued in
col. 2 |
