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J&J Agrees to Propulsid Settlement of $90 Million

February 06, 2004|From Times Wire Services

Johnson & Johnson said Thursday that it agreed to pay up to $90 million to settle claims by some patients who claim the company's withdrawn heartburn drug, Propulsid, caused heart problems.

Other patients and families who do not participate in the settlement still would be eligible to pursue their claims individually in court, which could eventually cost J&J more money.

About 4,000 plaintiffs are included in the settlement, including 300 who are alleged to have died from taking the drug, which was linked to heart problems.

The agreement is effective only if 85% of the death claims and 75% of the remaining patients agree to the terms.

Also, at least an additional 12,000 patients who have not filed lawsuits but claim they were harmed by the drug also must agree to the settlement for it to become effective.

As part of the agreement, all participating plaintiffs would be required to submit their medical records to a court-appointed independent medical panel.

Before the treatment was taken off the U.S. market in July 2000, the Food and Drug Administration warned that Propulsid could cause irregular heartbeats and sudden death.

In 2001, a jury in Mississippi awarded a total of $100 million to 10 plaintiffs. That award was later reduced, and J&J is asking a panel of the state Supreme Court to reverse the award.

Jim Shannon, the Mississippi lawyer who won that case and represents about 600 consumers with pending or potential federal claims, said the proposed settlement was inadequate.

"This ain't gonna fly," he said. "We've got people who have been seriously injured and killed by this drug. This is not enough to adequately compensate them."

J&J said Thursday that its Janssen unit would pay between $69.5 million and $90 million to settle the lawsuits in the settlement, depending on the number of patients who agree to join it.

Because the settlement covers a large percentage of the 4,000 patients who are already involved in litigation, the agreement may help limit Johnson & Johnson's liability in the Propulsid matter, analysts said.

Shares of J&J closed up 2 cents at $54.50 on the New York Stock Exchange.

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Reuters and Bloomberg News were used in compiling this report.

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