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J&J Unit To Pay $90M In Propulsid Claims

Feb 6, 2004 | Star Ledger

Johnson & Johnson's Janssen Pharmaceutica division said yesterday it agreed to a $90 million settlement to resolve federal litigation involving thousands of patients harmed by the company's heartburn drug Propulsid.

The litigation involves 4,000 individuals, including 300 who allegedly died as a result of using the medicine.

Under the terms of the deal, 85 percent of the death claims and 75 percent of the remaining plaintiffs agreed to the terms, according to a joint statement released by the company and a lead attorney for the plaintiffs.

In addition, 12,000 people who have filed claims but have not sued also must agree to terms of the settlement before it becomes effective.

Johnson & Johnson will pay a minimum of $69.5 million and a maximum of $90 million depending on the number of plaintiffs who participate in the settlement.

"It does appear that this would be a significant piece of the plaintiffs," CIBC World Markets analyst Mara Goldstein said. "Anything that any company can do to limit their liability by entering into broad class settlements are generally positive."

The agreement requires the plaintiffs to submit medical records to a court appointed medical panel. The panel will determine whether injuries described in individual claims were caused by the drug.

Propulsid was approved in 1993 as a treatment for people with gastroesophagel reflux disease who did not respond to other treatments.

Seven years later, Janssen withdrew the drug from the market after it was blamed for causing a range of conditions, from irregular heartbeats to sudden death. By then, more than 30 million prescriptions had been written for the drug in the United States.

As part of the proposed settlement, Johnson & Johnson said it also will pay $15 million for an administrative fund and up to $22.5 million for legal fees to the plaintiffs steering committee.

Neither Johnson & Johnson nor Russ Herman, lead attorney for the plaintiffs steering committee, would answer questions about negotiations or the proposed settlement. "We're just not able to go beyond the joint statement," company spokesman Jeffrey Leebaw said.

The steering committee plans to meet with all attorneys representing plaintiffs during a closed question-and-answer meeting next week in Florida. The steering committee has 180 days to enroll the minimum number of plaintiffs for the agreement.

Johnson & Johnson is attempting to reverse a jury verdict awarded as part of a separate group of lawsuits in Mississippi over Propulsid. In that case, a jury awarded $100 million in damages to 10 people in 2001. The verdict was later reduced to $48 million.

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