3-Baxter settles with families of dialysis patientsNov 28, 2001 | Reuter
The announcement came three weeks after the company said it had identified a probable link between its Althane blood filters, or dialyzers, and certain patient deaths.
Each of the 10 families will receive 55 million pesetas, or about $289,000. Settlements in wrongful death cases in Spain usually range between 20 million and 60 million pesetas.
Baxter spokeswoman Sally Benjamin Young declined to comment on whether Baxter was considering settlements with other families of patients who died, but she said, "We have a strong interest in working with these families."
Analysts said they expect Deerfield, Illinois-based Baxter to settle all outstanding cases as soon as possible.
Bruce Cranna, an analyst with ABN Amro, said $289,000 per family "struck me as slightly low, but it varies by geography."
He added, "You can't use that figure to extrapolate domestic liability. They'll settle the U.S. cases for more than that."
Kenneth Moll, the Chicago-based attorney who filed the first lawsuit against Baxter two weeks ago, called the settlement "totally inadequate."
"It's not fair that the people in Spain should get such a minuscule amount," he said. "We want to treat each claimant the same around the world."
Moll said the cases should settle for $2 million to $15 million each, excluding punitive damages.
U.S. STILL INVESTIGATING DEATHS
U.S. health officials are investigating deaths linked to Baxter kidney dialysis filters in Germany, Croatia, Italy, Colombia, Taiwan and two U.S. states, Texas and Nebraska.
In a recent interview with Reuters, an official with the U.S. Food and Drug Administration said he believed Baxter's filters were linked to the deaths. The number of deaths is believed to be 51 to 53.
Earlier this month, Baxter determined that a fluid used in manufacturing the filters appeared to play a role in the deaths of more than 50 people, 11 of whom were in Spain. The dialyzers filter toxins from the blood of kidney patients.
At that time, Baxter said it had ceased production of the Althane dialyzers, recalled the product and closed production plants in Ronneby, Sweden, and Miami Lakes, Florida.
It also said it would take a fourth-quarter charge of up to $150 million to cover discontinuing the product line, legal expenses and all other related costs.
Baxter said it has not been contacted by anyone representing the 11th Spanish kidney patient who may have died as a result of treatment with the dialyzer.
The 10 families with whom the company reached a settlement have asked Spanish authorities to drop a criminal investigation into the matter, Baxter said.
"It was a fair agreement," a Spanish lawyer told Reuters.
But under Spanish law, a public investigation related to the suits could continue, lawyers said.
Baxter said it has not been served with a lawsuit filed by the Spanish government. It said the settlement does not preclude the government from pursuing legal action.
CROATIAN GOVERNMENT HAS NOT SUED
The Croatian government has not sued Baxter and has not indicated that it will, although Ana Stavljenic Rukavina, who stepped down as Croatia's health minister after the dialysis scandal, said she would file a private suit.
The Croatian government has offered to assist the families of the deceased by offering information and legal support.
"It is in the government's interest that each family finds the best solution, and it must be decided by (the families) and their lawyers," a Croatian government official told Reuters.
Benjamin Andrew, an analyst with William Blair & Co., said he did not expect Baxter to incur additional charges as a result of settlements with families, and he noted that settlements would probably be for smaller amounts in Croatia, where about 40 percent of the deaths occurred.
"This is not a bad number," ABN Amro's Cranna said of Baxter's settlement. "Investors don't like uncertainty. They always like to see the beginning of the end, and I think that's what we're seeing here."
Bucking the trend in the broader market, Baxter shares, were up 99 cents to $50.51, about 9.5 percent off their peak of $55.90 set in late September.