$3.7 Billion For Dieters Who Used Fen-Phen
Fen-phen hotline For information on how to join the fen-phen settlement, call: 1-800-386-2070.
NEW YORK - American Home Products has agreed to pay $3.75 billion to settle thousands of lawsuits over health problems from the once-popular fen-phen diet drug combination, the company announced today.
The money will go to ill patients and for medical monitoring of those who are still healthy. Pending a judge's approval, payments will begin this year.
Some 6 million Americans used the drug combo before it was found to cause potentially fatal heart-valve damage.
About 4,100 suits have been filed, making it one of the largest product-liability cases ever.
The settlement is open to anyone who used Pandimin or Redux in the United States, regardless of whether they filed suit, American Home said.
"This agreement ensures that all class members will be treated with parity and fairness," said attorney Stanley Chesley, one of the plaintiffs' lead negotiators.
American Home made fenfluramine, the "fen" in the fen-phen combination, under the brand name Pondimin. It also made Redux, a chemical cousin. In September 1997, the U.S. Food and Drug Administration pushed for the drugs' withdrawal after a Mayo Clinic study linked fen-phen to heart-valve damage.
"This settlement provides fair and equitable terms for both diet-drug claimants and American Home Products" and allows the company to "move beyond the uncertainty and distractions of litigation," said company Chairman John Stafford.
Louis Hoynes, senior vice president and 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.
On news of the settlement, shares of American Home stock rose $3.12 1/2, or 7 percent, to $48.25.
American Home said the maximum amount available to an individual in the settlement is about $1.5 million, depending on the seriousness of their health problems, how long they took the drugs, their age and other medical conditions.
The settlement is optional, allowing users to pursue lawsuits. However, if American Home believes too many refuse to participate, it can terminate the deal.
The settlement covers all claims except for patients who say they suffer from primary pulmonary hypertension, a rare but serious lung disorder. The company said it decided to deal with these cases separately because they are few in number. It also noted that fen-phen's label included a warning that the drug could cause the disorder.
The settlement includes a $2.55 billion fund to pay for injuries, $1 billion for medical monitoring and $200 million in plaintiffs' attorney fees. The company also agreed to pay $25 million for heart-disease research.
American Home took in about $13 billion in revenue last year and earned $2.5 billion in profits.
In the only verdict yet, Debbie Lovett, 36, of Grand Saline, Texas was awarded $23.3 million in July by a jury for heart damage she suffered after taking fen-phen for more than three months. Last month the company said it settled the case for less than 10 percent of that amount.