American Home Products Corp.’s $3.75 billion settlement of lawsuits over its withdrawn diet drugs leaves most former users unfairly “trapped” in an agreement providing inadequate compensation, opponents of the pact told a judge.
U.S. District Judge Louis Bechtle heard final arguments today about the fairness of the settlement, which sets aside $1 billion for future medical checkups for users of American Home’s Pondimin and Redux drugs and $2.35 billion to resolve individual claims. As many as 6 million consumers may have taken the drugs as part of the fen-phen diet-drug combination.
But less than 20 percent of those potential former users have acknowledged they even know about the settlement, opponents argue. Consumers had until March to decide whether to accept payments under the settlement or forfeit the right to sue American Home for punitive damages over its handling of the diet drugs.
“I’d say people are clearly trapped by this settlement,” said Tom Pertle, a Houston lawyer representing former fen-phen users objecting to the settlement.
Consumers who may develop future health problems linked to the drugs won’t be able to properly hold American Home financially responsible for their injuries, Pertle argued.
Attorneys for former fen-phen users supporting the settlement countered that consumers can back out of the settlement and sue American Home if their conditions worsen. The agreement also provides money to monitor dieters’ hearts to pinpoint health problems linked to the drugs.
Consumers contend that American Home officials sold Pondimin and Redux knowing that the drugs damaged some users’ hearts and left others suffering from a fatal lung disease.
“This settlement is an opportunity to provide justice for these people, to save lives and to improve health,” said Michael Fishbein, a Philadelphia lawyer who helped negotiate the settlement with American Home last year.
Bechtle, who has overseen the progress of fen-phen suits filed in federal court against American Home since 1997, is expected to approve the settlement later this summer.
Approval of the agreement, however, won’t end American Home’s legal liability for the drugs, yanked off the market in 1997 after being linked to heart problems.
About 44,000 former dieters already have chosen to reject the pact to press their claims separately. More than 266,000 have agreed to receive compensation under the agreement, lawyers said in court today.
Lawyers for former fen-phen users expect that the vast majority of remaining claims will be settled, leaving a handful to go to trial. That could clear the way for American Home to try again to merge with a rival drugmaker, industry analysts say.
The company has seen two potential combinations — with Monsanto Co. and Warner-Lambert Co. — bite the dust in the last two years. Monsanto ended up merging with Pharmacia & UpJohn while Warner-Lambert was swallowed up by Pfizer Inc.