Fen-Phen Users Hit Deadline to Drop Out of Settlement
Today is the deadline for the 6 million people who took the fen-phen diet drug combination--which has been linked to serious heart problems--to drop out of a $3.75-billion national settlement with the pill’s maker.
By opting out of the suit now, patients will retain the ability to sue American Home Products Corp. for punitive damages. If too many people opt out of the deal, however, American Home Products has the option of terminating the settlement.
Plaintiff attorneys are divided on how many will do so, with estimates ranging from 5% to 50%, based on several interviews this week.
American Home representatives said they expect some people to opt out of the agreement, though not enough to derail it.
The 6,000 fen-phen lawsuits, and the possibility that the settlement may fall apart, have hurt the company’s ability to find a merger partner, analysts say. Madison, N.J.-based American Home lost its bid to buy rival Warner-Lambert Co. in part because uncertainty surrounding the diet drug litigation pummeled its stock.
The settlement reached last October pays fen-phen users a maximum of $1.5 million; the actual amount varies depending on their level of injury and how long they took the drugs. It includes money to pay patients who say they were injured by the drugs and for future medical monitoring for those who are still healthy.
American Home made fenfluramine, the “fen” in the fen-phen combination, and gave the drug a brand name of Pondimin. It also made Redux, a chemical cousin. In September 1997, the drugs were removed from the market after a Mayo Clinic study linked fen-phen to potentially fatal heart valve damage.
The settlement is open to anyone who used fen-phen and Redux in the United States, whether or not they filed suit.
After today, American Home has 30 days to decide whether to terminate the deal if it believes too many people have opted out of the settlement. Shares of American Home closed up $2.06 at $53.88 on the New York Stock Exchange.
