Fen-Phen Settlement to Cost AHP $4 Billion
American Home Products Corp. is set to pay roughly $4 billion to settle thousands of lawsuits by consumers who contend that they were injured by fen-phen, a once-popular diet pill combination, lawyers close to the case said Friday.
The deal, among the largest mass tort settlements in history, would cover the estimated 6 million people who took fen-phen before the combination was pulled from the market in 1997 after studies linked it to heart-valve disease. Since then, about 4,000 personal-injury lawsuits seeking damages have been filed against AHP, which marketed one of the two drugs.
After months of negotiations, plaintiffs' lawyers and attorneys for AHP began to circulate a memorandum of understanding Friday, providing the outline of a settlement, lawyers said. Under the terms being discussed, the company would set up a $2.8-billion fund for people allegedly injured by fen-phen and for anyone who develops injuries from the drugs in coming years. An additional $1.2 billion would go to establish a fund for medical monitoring of former fen-phen users.
Plaintiffs would receive between $125,000 and $1.5 million, depending on the extent of their injuries and their ages. The greater the injury and the younger the plaintiff, the larger the award.
Officials at AHP declined to comment. Sol Weiss, one of the lead plaintiffs' attorneys, also would not comment. Some details in the agreement were still being negotiated--particularly the range of awards--and lawyers on both sides planned to work over the weekend.
Even after a final deal is signed, fen-phen litigation will be around for years because the settlement gives plaintiffs several chances to opt out and sue on their own. Also, the deal might cover users with primary pulmonary hypertension (PPH), an often-fatal lung disease allegedly caused by the drugs.
But all parties are now a giant step closer to resolving a highly contentious legal battle over a drug combination once hailed as a miraculous weapon in the war on obesity. Taken together, fenfluramine and phentermine--nicknamed fen-phen--worked by controlling users' appetites, helping millions of Americans shed unwanted pounds and turning the combination into one of the country's most sought-after prescriptions. AHP marketed fenfluramine as well as Redux, a close chemical cousin.
