Fen-Phen's Manufacturer Sued for Billions
May 17, 2001
American Home Products Corporation, the giant pharmaceutical company that manufactured the drugs used in the now infamous fen-phen diet drug cocktail, announced today that it is setting aside an additional $7.5 billion to compensate those injured by fen-phen. The company's reserves for such litigation now total over $12 billion, a sum almost unheard of in the pharmaceutical industry.
American Home Products says that it has already paid approximately $4 billion in fen-phen settlement claims. While in the fall of 2000 the company said its reserves of $4.75 billion were more than adequate to cover litigation expenses, it has apparently reevaluated that position. "While this [charge] is more than we anticipated . . . it is in the best interest of the company and its shareholders to put the diet-drug litigation behind us," said Louis L. Hoynes, the company's executive vice president and general counsel.
American Home Products' problems began when its popular diet drugs Redux (dexfenfluramine) and Pondimin (fenfluramine) were shown to cause serious heart valve defects in patients. Often, doctors would prescribe a combination of Pondimin and another drug, phentermine to their weight loss patients. This so-called fen-phen cocktail caused similar heart valve problems. The FDA recalled both Redux and Pondimin in 1997.
The company has indicated that it will aggressively try to settle lawsuits filed by injured patients rather than fight them in court. "A more protracted process involving many months of litigation and possible appeals and ongoing disputes over many claims could have been ultimately less costly in dollars," executive vice president Hoynes said. "But the prolonged disruption would have been more costly to the company in many tangible and intangible ways. We firmly believe that the extra cost of an early resolution is warranted."
-- Article Courtesy of InjuryBoard.com
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