$600 Million Offered to Settle AIDS Blood Suit

In a major development in a decade-long legal dispute, four drug companies accused of selling AIDS-tainted blood products to thousands of U.S. hemophiliacs will offer $600 million to settle the litigation.

The offer was disclosed Thursday night by Bayer AG, which said the drug companies planned to notify lawyers for hemophiliacs and their families by letter today. The three other defendants in the case are Baxter International Inc., Rhone-Poulenc Rorer Inc. and Alpha Therapeutics Inc.

The settlement offer comes as the death toll continues to mount in the United States and other nations from a cruel link between acquired immune deficiency syndrome and hemophilia. It has been estimated that roughly half the 20,000 hemophiliacs in the United States are HIV-positive.

“This is a major development.” said Corey Dubin, of Goleta, president of a national organization representing HIV-positive hemophiliacs. “It is the first serious offer ever put on the table.”

But Dubin, 41, a Los Angeles native who contracted the AIDS virus in the early 1980s from blood during a transfusion, cautioned that the offer has some major flaws that may make it unacceptable. Dubin said his group, the Committee of Ten Thousand, has told drug makers that an offer of $800 million would be acceptable.

If accepted, the companies’ offer could provide payments of roughly $100,000 to every American hemophiliac who contracted the virus. The amount of the payment would depend on how many claims are filed. Bayer estimates 6,000 people in the U.S. are covered by the settlement. But plaintiffs have claimed the number is closer to 10,000.

The settlement offer also includes a $40-million fund to pay plaintiffs’ lawyers fees.

“This gives us an opportunity to bring an end to all this litigation now, and it also offers the opportunity for persons who are HIV infected as a result of this tragedy to receive some quick and certain financial relief,” said Thomas Kerr, assistant general counsel for Bayer, noting that the companies make no admission of wrongdoing.

About 750 hemophiliacs and their families have sued the companies, saying that they should have treated the clotting factors with heat to kill the AIDS virus. Dubin said the drug makers have prevailed in 13 court cases while the plaintiffs have won two cases now under appeal. However, Dubin said new evidence has emerged.

“We’ve uncovered their plasma collection policies, their violations of Food and Drug Administration rules and that they were collecting blood from prisoners who had hepatitis” and were intravenous drug users, Dubin said.

Dubin said the settlement offer is coercive because it would force nearly every hemophiliac to accept it. He said Bayer has threatened to withdraw the offer unless plaintiffs agree that no more than 100 individuals be allowed to opt out of the settlement.

The offer is less than one-quarter the amount that some of the same companies agreed to pay Japanese hemophiliacs last month.

“The burden of proof is different in Japan... in my view unfairly,” Kerr said. In addition, he said, the cost of living in Japan is higher.