Valve Maker Agrees to Modify Settlement Offer : Hearing: The changes may persuade more of the heart valve recipients who have filed lawsuits against Shiley Inc. in Irvine to accept the proposal.

The maker of a potentially fatal heart valve has agreed to modify its offer to recipients, which could persuade more recipients that they should accept the proposal, attorneys for the patients said Tuesday.

Shiley Inc. in Irvine and its parent company, Pfizer Inc. in New York, had initially offered to pay $75 million for research and valve replacement surgery and an additional $80 million to $130 million for physician consultations and anxiety-related medical expenses. The two companies also would set aside $300 million more for patient or survivor claims.

The proposal also called for setting up an independent panel that would draw up guidelines under which a recipient could be compensated by Shiley for having the valve replaced. The guidelines were expected to take into consideration the age of the patient and the likelihood that a valve would fracture.

Late Monday, Pfizer attorneys also agreed to set up an appeal system through which recipients who want to have their valves replaced--yet fail to meet the panel’s guidelines--could have their cases heard, said James Capretz, an Irvine lawyer representing more than 300 Shiley valve recipients. Of those, 22 live in California.

“We think it’s a much more improved settlement,” Capretz said in a phone interview. “We are not 100% satisfied, but like most settlements, we feel we have done the best we could.”

The Food and Drug Administration has received reports of more than 350 recipients whose valves have fractured when the struts that hold the devices together came apart. Two-thirds of those whose valves fractured have died. It is estimated that there are nearly 55,000 recipients of the valves worldwide.

Some recipients represented by Capretz have filed lawsuits against Shiley claiming emotional distress. Those suits could come to trial in Orange County Superior Court in Santa Ana later this year.

The modifications to the proposed settlement were presented at a federal court hearing in Cincinnati, where U.S. District Judge S. Arthur Spiegel is considering the fairness of the entire offer. The hearing is scheduled to resume on July 22.

Opponents of the settlement have argued that Shiley and Pfizer should pay the cost of replacing any recipient’s valve because those patients must live with the fear that a fatal fracture might occur.

“Many don’t have the wherewithal to pay for it,” Capretz said of replacement surgery. “They want the elective surgery to rid themselves of this psychological nightmare.”

Shiley spokesman Robert Fauteaux had not yet heard of the modifications late Tuesday and could not comment. Shiley officials have argued that the risks involved in valve replacement surgery are much greater than keeping the devices.

When the settlement hearings began last week, all but three of Capretz’s clients opted not to accept the Shiley and Pfizer offer. Because the proposal has now been modified, the judge gave recipients who opted out of the early settlement 60 days to change their minds, Capretz said.

But Elaine Levenson, a Capretz client who started a Pittsburgh-based support group for valve recipients, said that, even with the modifications, Shiley and Pfizer “are still in control of our lives.”

The recipients “really don’t like to be dictated to by an independent panel,” said Levenson, who had a valve implanted in 1981. “They would like to make an independent decision between their doctor and themselves.”

Both sides also agreed to clarify language in the settlement offer, including a provision guaranteeing that the panel members would not be affiliated with Shiley or Pfizer, Capretz said. The two companies also agreed not to collect any profits from patented products related to research on the faulty valves, he said.