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$215-Million Shiley Valve Settlement Approved : Medicine: The deal offers up to $4,000 for emotional distress and other benefits to 51,000 patients and their families. The defective device has been blamed in 300 deaths so far.

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SPECIAL TO THE TIMES

About 51,000 recipients of a potentially defective heart valve that has been blamed for killing 300 people would receive up to $4,000 in cash each and other benefits for their emotional distress as part of a court settlement approved Wednesday.

A federal judge in Cincinnati approved the $215-million settlement offer by Shiley Inc., a medical products company in Irvine, and its parent company, New York-based Pfizer Inc. The settlement offer was announced last month.

The agreement, however, does not prohibit patients or their heirs from filing legal claims against Shiley should their mechanical valves fracture in the future.

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The class-action lawsuit in Cincinnati alleged that the companies knew the heart valves, sold from 1979 to 1986, could fracture and possibly kill the recipient.

William C. Steere Jr., Pfizer chairman and chief executive, said the company still believes that complaints about the valve lack merit, but he accepted the settlement to end the court battle.

The settlement provides $90 million to $140 million to recipients for medical or psychological consultations, as well as compensation to their spouses. That works out to between $2,500 and $4,000 per patient. The amount depends on how many patients decide to take the settlement and how many never file a claim, which would increase the amount paid to others.

The agreement also sets aside $75 million for valve-related research, including techniques to identify if a recipient is at a great risk of fracture.

Pfizer said it will fund the settlement with the proceeds from its $230-million sale earlier this year of most of Shiley’s assets, as well as with insurance reimbursements.

The terms of the settlement also allow about 1,000 heart valve patients who previously decided not to join the litigation to decide by Sept. 28 whether they want to join the settlement. Lawyers for about 650 patients who filed lawsuits in Orange County Superior Court, however, said they expect most of their clients to reject the settlement offer and continue to pursue emotional distress claims in separate court actions.

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Approval of the Shiley-Pfizer offer by U.S. District Judge S. Arthur Spiegel is “a great positive for the company,” said Sharon Dorsey Wagoner, an analyst with Argus Research in New York. “Obviously, the fewer people who proceed with the cases, the better for Shiley.”

Plagued by the heart valve failures and doggedly chased through court, Shiley stopped making the valves six years ago. Though it sold its valve manufacturing operations in February to Sorin Biomedical in Irvine, it still operates a valve research center in Irvine.

“This settlement will go far toward putting this complex and time-consuming litigation behind us and help to eliminate the disruptions and uncertainties involved in such litigation,” Steere said in a statement.

An independent panel of experts will determine, on a case-by-case basis, if surviving patients need operations to replace their heart valves. Shiley will pay for any needed operations.

Separately, the settlement terms require the company to provide up to $300 million for patient or survivor claims in the event of valve fractures, though that amount is not considered part of the total funds now available.

Under the special amount set aside, the company will pay $500,000 to $2 million for each claim, provided the survivors or heirs don’t file a lawsuit. The wide range depends on such factors as the age and overall health of the patient.

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Elaine Levenson, who started a Pittsburgh support group for valve recipients, said she expected that most of the 100 active members would proceed with their litigation. She said that health costs can be much greater than the $2,500 to $4,000 individual benefits in the offer.

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