Brief of Brown v. American Home Products Corporation Diet Drugs, No. 99-20593 (E.D.Pa. 08-28-2000)
| [1] | IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA |
| [2] | CIVIL ACTION No. 99-20593 |
| [3] | 2000.EPA.0042649 <http://www.versuslaw.com> |
| [4] | August 28, 2000 |
| [5] | IN RE (PHENTERMINE, FENFLURAMINE, DEXFENFLURAMINE) PRODUCTS LIABILITY
LITIGATION SHEILA BROWN, ET AL. v. AMERICAN HOME PRODUCTS CORPORATION DIET DRUGS |
| [6] | The opinion of the court was delivered by: Bechtle, J. |
| [7] | THIS DOCUMENT RELATES TO MDL DOCKET NO. 1203 |
| [8] | MEMORANDUM AND PRETRIAL ORDER NO. 1415 |
| [9] | Presently before the court is the Joint Motion of the Class Representatives
and American Home Products Corporation ("AHP") for an order certifying
and approving the nationwide settlement class embodied in the Settlement
Agreement entered into between the parties on November 19, 1999. For the
reasons set forth below, the court will grant the motion and will certify
the class and approve the settlement pursuant to Federal Rule of Civil Procedure
23. The court's findings of fact and conclusions of law are as follows. |
| [10] | I. BACKGROUND |
| [11] | A. The Diet Drug Litigation |
| [12] | This litigation involves claims regarding the health effects of two related
prescription drugs--fenfluramine and dexfenfluramine. Fenfluramine is an
appetite suppressant that affects blood levels of the neurotransmitter,
serotonin. Dexfenfluramine, the "d-isomer" of fenfluramine, is
chemically related to fenfluramine and acts as an appetite suppressant by
stimulating the release of serotonin from nerve cells in the brain and by
reducing the reuptake of the released serotonin. In 1973, The United States
Food and Drug Administration ("FDA") approved A.H. Robins, Inc.'s
new drug application to market fenfluramine in the United States. (Ex. P-180.) |
| [13] | Before 1989, A.H. Robins, Inc. was responsible for the marketing, sale
and labeling of fenfluramine in the United States. In 1989, AHP acquired
A.H. Robins. Following the acquisition, fenfluramine was
marketed by AHP under the trade name "Pondimin." Between December
1989 and September 15, 1997, AHP was the only company to market fenfluramine
in the United States and had the exclusive responsibility for its regulatory
compliance, adverse event reporting, safety surveillance and labeling. |
| [14] | Sales of Pondimin were relatively flat until 1992. In 1992, a series of
articles by Michael Weintraub, M.D., were published in the Journal of Clinical
Pharmacology and Therapy, in which Dr. Weintraub advocated the use of fenfluramine
together with the drug phentermine for weight loss management without the
adverse side effects associated with the use of fenfluramine alone. This
regimen popularly became known as "Fen-Phen." With the introduction
of "Fen-Phen" therapy to the market place, sales of Pondimin skyrocketed.
From January 1995 to mid-September 1997, approximately 4,000,000 persons
in the United States took the drug Pondimin. (Tr. 5/2/00 at 26-27; Ex. P-183
at 29 of 33; Ex. P-182 at 5 of 13.) |
| [15] | Dexfenfluramine, the chemical cousin of Pondimin, was developed by Les
Laboratories Servier S.A. ("LLS") in France. The drug afforded
the same anorexic effects as Pondimin without the need to add phentermine
to ameliorate adverse side effects. Before 1994, the Lederle Division of
American Cyanamid Company had the right, together with Interneuron Pharmaceuticals,
Inc., to develop and promote dexfenfluramine in the United States under
the trade name "Redux." In 1994, AHP acquired American Cyanamid.
Following that acquisition, responsibility for the development and promotion
of Redux in the United States in conjunction with Interneuron was assumed
by AHP. Interneuron received approval to market Redux in the United States
in mid-1996. As with Pondimin, sales of Redux were brisk. From June 1996
through September 15, 1997, two million people in this country took Redux.
(Tr. 5/2/00 at 28; Ex. P-183 at 29 of 33; Ex. P-182 at 5 of 13.) |
| [16] | The distribution of Redux users by age and sex was virtually the same
as that for Pondimin. (Ex. P-94 at 3 of 41; Ex. P-53 at 9 of 54.) Most of
the individuals who took the diet drugs Pondimin and Redux were middle aged
women. (Ex. P-94 at 3 of 41; Ex. P-53 at 9 of 44.) |
| [17] | From the viewpoint of plaintiffs' counsel, the evidence reveals that before
Pondimin and Redux were withdrawn from the market in 1997, which is discussed
infra, AHP received considerable information from a number of sources that
both drugs could cause damage to the valves in the heart leading to valvular
regurgitation. This information consisted of reports in the medical literature,
reports from animal studies, reports concerning heart valve damage in patients
taking drugs with similar effects on serotonin metabolism, adverse event
reports and reports from a doctor commissioned to analyze certain facts
for Interneuron. According to plaintiffs, notwithstanding this information,
during the period of time AHP marketed dexfenfluramine and fenfluramine,
it failed to investigate these reports, to look at whether or not the drugs
were cardiotoxic or to label the drugs as being potentially harmful to the
heart valves. |
| [18] | In response, AHP has vigorously contested the plaintiffs' interpretation
of these events, noting that much of this information was submitted to the
FDA for its own analysis; that none of the doctors or scientists who reported
on Pondimin or Redux, either in the published literature or in the adverse
event reports, concluded that either product caused any valvular disease;
and that, given the substantial prevalence of such valvular disease in the
general population, it was not possible to conclude, on the basis of these
reports, that its products caused disease. |
| [19] | In March 1997, researchers at the Mayo Clinic in Rochester, Minnesota
began observing an association between the use of fenfluramine and/or dexfenfluramine
and a particular type of valvular heart disease. Eventually, the Mayo Clinic
researchers observed this unusual form of valvular heart disease in 24 women
who had used fenfluramine in combination with phentermine. (Ex. P-95 ¶ 39;
Tr. 5/2/00 at 29; Ex. P-113; Ex. P-181; Ex. P-182.) The findings of the
Mayo researchers were first brought to the attention of the public in a
July 8, 1997 press release and were eventually published on August 28, 1997,
in the New England Journal of Medicine. (Exs. P-181 & P-113.) |
| [20] | On July 8, 1997, the FDA issued a public health advisory, followed by
letters to 700,000 physicians requesting information about similar patients.
Based on information the FDA received in response, the FDA requested the
withdrawal of fenfluramine and dexfenfluramine from the U.S. market. On
September 15, 1997, AHP and the FDA announced that there would be no further
sales of Pondimin and Redux in the United States. Subsequently, the causal
relationship between valvular heart disease and the use of dexfenfluramine
and fenfluramine was investigated and confirmed in three epidemiological
studies published in the New England Journal of Medicine in September 1998.
(Exs. P-127 (Jick), P-130 (Khan) & P-170 (Weissman).) |
| [21] | A wave of litigation followed. As of the time that class notice issued
in this matter, approximately 18,000 individuals who used Pondimin or Redux
filed lawsuits against AHP. (Tr. 5/2/00 at 196-97.) Many of these lawsuits
involved actions in which individuals sought to recover for personal injuries,
primarily valvular heart disease, that they sustained as a result of using
Pondimin or Redux. In addition, over one hundred plaintiffs instituted class
actions in which they sought either: (1) to create an equitable fund to
provide medical screening services to patients who had used Pondimin and/or
Redux for varying periods of time to determine if they had asymptomatic
valvular heart disease; and/or (2) to recover the amounts expended by consumers
to purchase Pondimin and/or Redux or to obtain echocardiograms as a consequence
of exposure to these drugs; and/or (3) to recover personal injury damages
on behalf of classes of persons who took Pondimin and/or Redux. (Tr. 5/2/00
at 20-21 & 36-39.) |
| [22] | To the extent that these actions were filed in the federal judicial system,
the Judicial Panel for Multidistrict Litigation entered an order transferring
all of the actions to the United States District Court for the Eastern District
of Pennsylvania for coordinated and/or consolidated pretrial proceedings
under MDL Docket No. 1203. As the transferee court, this court entered an
order creating and appointing a Plaintiffs' Management Committee ("PMC")
to oversee the conduct of the coordinated/consolidated pretrial proceedings
on behalf of the plaintiffs. See Pretrial Order No. 6. *fn1 |
| [23] | By the summer of 1999, a combination of state court and federal court
decisions certified classes to pursue some form of relief on behalf of those
persons who had used AHP's diet drugs. See Pretrial Order No. 865, Jeffers
v. American Home Prods. Corp., C.A. No. 98-CV-20626 (certifying nationwide
medical monitoring class in MDL court); Burch, et al. v. American Home Prods.
Corp., C.A. No. 97-C-204(1-11) (certifying medical monitoring and personal
injury class in West Virginia); Rhyne v. American Home Prods. Corp., 98
CH 409 (certifying medical monitoring class in Illinois); Vadino, et al.
v. American Home Prods. Corp., Docket No. MID-L-425-98 (certifying class
seeking medical monitoring and damages for unfair and deceptive trade practices
in New Jersey); In re: New York Diet Drug Litig., Index No. 700000/98 (certifying
medical monitoring class in New York); In re: Pennsylvania Diet Drug Litig.,
Master Docket No. 9709-3162 (CCP, Phila.) (certifying medical monitoring
class in Pennsylvania); Earthman v. American Home Prods. Corp., No. 97-10-03970
CV, (certifying medical monitoring class in Texas); St. John v. American
Home Prods. Corp., 97-2-06368-4 (certifying medical monitoring class in
Washington). |
| [24] | By the summer of 1999, the parties in both the state litigation and the
federal MDL litigation had virtually completed discovery with respect to
AHP's conduct. (Tr. 5/2/00 at 21-23.) More than 6,000,000 documents were
produced by AHP and carefully reviewed, analyzed and collated by the plaintiffs.
Id. In the federal litigation, the PMC took nearly 100 depositions of present
and former employees of AHP, Interneuron, the FDA and other third parties.
(Tr. 5/2/00 at 21-23; Ex. P-1000.) The state court plaintiffs conducted
similar deposition discovery, deposing many of the individuals who were
the subject of the MDL discovery effort. |
| [25] | In both the MDL litigation and the state court litigation, the plaintiffs
consulted with experts in various subjects related to the litigation, including
primary pulmonary hypertension, cardioepidemiology, cardiology, cardio-thoracic
surgery, clinical pharmacology, cardiopathology, economics, and the like.
These experts revealed their opinions in Rule 26 disclosures and were subject
to both discovery depositions and, in many cases, depositions designed to
preserve their testimony for use at trial. Thus, by the summer of 1999,
the plaintiffs had a thorough understanding of the facts underlying the
question of AHP's liability to those individuals and classes of individuals
who had used Pondimin and Redux, as well as a firm grasp of the relevant
scientific principles pertaining to liability, injury and causation in these
cases. Also, by the summer of 1999, cases against AHP had begun to go to
trial. The most significant of these was the New Jersey Vadino case in which
New Jersey Superior Court Judge Marina Corodemus presided over a trial of
the class claims certified in that action. |
| [26] | B. The Settlement Negotiations |
| [27] | In late April 1999, AHP invited representatives of the varying constituencies
of state and federal plaintiffs to begin negotiations with it for a "global
resolution" of the Diet Drug Litigation. In response to that invitation,
a negotiating coalition was formed among representatives of the PMC in the
MDL court and representatives of the plaintiffs in state courts with pending
certified class actions. (Tr. 5/2/00 at 40-42; AHP Ex. 629 at 65-66 and
71; AHP Ex. 628 at 60-61.) |
| [28] | The plaintiffs' negotiating coalition presented its initial proposal to
AHP in the form of a "term sheet" on June 1, 1999. (Tr. 5/2/00
at 47-48.) AHP responded to that proposal with a counter-proposal on June
28, 1999. (Tr. 5/2/00 at 48-49.) Thereafter, intense, adversarial and arm's-length
negotiations ensued for more than four months, during which time: Class
Counsel in New Jersey prepared for and began the medical monitoring class
action trial before Judge Corodemus; cases in Texas proceeded to trial and,
in one case, to a substantial verdict against AHP; and individual cases
were poised for remand for trial in the MDL 1203 proceedings. (Tr. 5/2/00
at 39; AHP Ex. 628 at 35.) Altogether, members of the negotiating coalition
and representatives of AHP participated in approximately 73 negotiating
sessions, over a period extending from April through November 1999. (Tr.
5/2/00 at 59.) |
| [29] | Those negotiating the settlement on behalf of the plaintiffs had no understandings,
or even negotiations with AHP with respect to any of their individual cases.
(Tr. 5/2/00 at 41 & 58-61.) The terms and conditions of the Settlement
Agreement were the product of a bargaining process between the parties involving
separately negotiating or "building up" the settlement's benefits
and obligations in contrast to a process of negotiating a lump sum dollar
amount that would then be allocated or "broken down" among class
members. The negotiators proceeded by negotiating the types of screening
and compensation benefits to be made available to class members and the
eligibility for those benefits. Only when those benefits and compensation
amounts had been essentially resolved did the parties negotiate the maximum
monetary commitment that AHP would incur in providing those benefits. (Tr.
5/2/00 at 59.) During the negotiations, AHP never offered, and the plaintiffs
never requested, payment of a lump sum to resolve the claims of class members.
To the contrary, the negotiations were devoted to working out a structure
that would appropriately resolve the claims of all individuals who took
Pondimin and/or Redux. Only when that structure was agreed upon did the
parties determine the amount of money that would be necessary to fund the
structure. (Tr. 5/2/00 at 58-61; Tr. 5/3/00 at 210-211; AHP Ex. 628 at 100.)
Each of the major benefit features of the settlement was the subject of
a separate, independent and, at times, heated negotiation process. Importantly,
under the settlement process that was employed, there was no intra-class
trading off of benefits. That is, one benefit of the settlement did not
have to be reduced in exchange for the creation or increase of another benefit.
(Tr. 5/2/00 at 42-59, 154-61 & 166-67; AHP Ex. 628 at 110-12.) Moreover,
the subject of attorneys' fees was not discussed until the end of the negotiations
and then only to limit the award of fees that might otherwise be payable,
subject to appropriate limitations for the benefit of the class. (Tr. 5/2/00
at 88; AHP Ex. 629 at 208-39.) |
| [30] | Throughout the negotiations, the members of the negotiating coalition
were willing to litigate their clients' claims in the event that negotiations
broke down. (Tr. 5/2/00 at 49, 60-61.) Members of the negotiating coalition
were armed with substantial leverage in their negotiations with AHP as a
result of plaintiffs' willingness and ability to litigate their claims should
negotiations fail. This leverage derived from, among other things, the pendency
of the Jeffers action brought by the PMC in the MDL court, several certified
state court medical monitoring class actions in which the negotiators or
their constituencies were participating, individual diet drugs cases pending
in the MDL proceedings and in state courts seeking compensation for personal
injury, and the trial of the Vadino medical monitoring case which was underway
when the negotiations were taking place. |
| [31] | By October 7, 1999, the parties had reached an understanding on the principal
terms of the settlement, embodied in a Memorandum of Understanding ("MOU").
(Ex. P-49.) After the execution of the MOU, the parties continued with round-the-clock
negotiations with respect to the terms left open by the MOU. (Tr. 5/2/00
at 57.) The court also ordered the PMC to make periodic reports to it on
fifteen-day intervals concerning the status of the Settlement Agreement.
The court was kept apprised of the status of the negotiations. See Pretrial
Order No. 929. |
| [32] | Ultimately, on November 18, 1999, the parties executed a Nationwide Class
Action Settlement Agreement with AHP. (Exs. P-3 through P-30.) The Court
granted preliminary approval of the Settlement Agreement on November 23,
1999 and set May 1, 2000 as the date to commence a Fairness Hearing regarding
the Settlement Agreement. See Pretrial Order No. 997. The Agreement has
since been subject to four amendments. (First Amendment, Ex. P-31; Second
Amendment with Exhibits, Exs. P-32 through P-48; Third Amendment, Ex. P-47;
and Fourth Amendment, Ex. P-278.) |
| [33] | C. Procedural Background and Fairness Hearing |
| [34] | On January 28, 2000, the court entered Pretrial Order No. 1071. That order
established a "Special Discovery Court" to convene on a weekly
basis commencing Wednesday, February 2, 2000 "for the limited and exclusive
purpose of promptly administering discovery requirements and resolving discovery
disputes applicable to proceedings before the Court regarding consideration
of the judicial approval of the nationwide class action Settlement Agreement."
Pretrial Order No. 1071 at 1. |
| [35] | On February 3, 2000, the court entered Pretrial Order No. 1109. That Pretrial
Order manifested the court's "intention that an eligible party have
the opportunity to conduct, under reasonable terms and conditions: (1) discovery
pertinent to the issues to be decided at the Fairness Hearing; or (2) discovery
deemed important by the eligible person in order to make the decision whether
or not to object to the settlement, appear at the Fairness Hearing to object
or provide the Court with written comments without an appearance at the
Fairness Hearing." Toward this end, Pretrial Order No. 1109 directed
that: |
| [36] | on or before February 20, 2000 class counsel and the defendant shall file
with the Court: (i) a statement identifying all fact witnesses to be called
to testify at the Fairness Hearing, together with a brief statement on the
anticipated substance of the testimony of each witness; (ii) copies of all
documents or other exhibits to be offered into evidence; and (iii) the identities
of all expert witnesses to be called together with the information required
in Federal Rule of Civil Procedure 26(a)(2)(B). On or before April 10, 2000
any person or party who has fulfilled the requirements of paragraph 17 of
PTO No. 997 shall provide to class counsel and the defendant: (i) a statement
identifying all fact witnesses to be called to testify at the Fairness Hearing
together with a brief statement on the anticipated subject of the testimony
of each witness; (ii) copies of all documents or other exhibits to be offered
into evidence; and (iii) the identities of all expert witnesses to be called,
together with the information required in Federal Rule of Civil Procedure
26(a)(2)(B). Pretrial Order No. 1109. |
| [37] | On February 10, 2000, the court entered Pretrial Order No. 1116 modifying
Pretrial Order No. 1109 as follows: |
| [38] | PTO No. 1109 is modified to the effect that class proponents shall have
until Monday, February 28, 2000, to disclose the names of all their intended
Expert Witnesses, provide Curriculum Vitae for each Expert Witness, provide
a list of any prior case in which any of the experts have testified, and
provide a summary of the expected subject area of each Expert's testimony
consistent with Rule 26(a)(2)(B). Also on that date, class counsel shall
provide the completed disclosures for at least half of the expert witnesses
identified. For any remaining Experts, full disclosures shall be completed
on a rolling basis by March 20, 2000. Pretrial Order No. 1116. |
| [39] | Acting as liaison counsel for the plaintiffs in the above-entitled matter,
Arnold Levin, Esq. transmitted copies of each of the above orders to each
attorney in the United States known or believed to be representing individuals
who are members of the class as defined above. |
| [40] | The beginning of the Fairness Hearing was adjourned, by one day, to May
2, 2000. At the Fairness Hearing, the proponents of the Settlement Agreement
and the persons who objected to the settlement pursuant to the terms of
Pretrial Order No. 997 ("the Objectors") had a full and fair opportunity
to offer all of the evidence that they wished to tender to the court concerning
the proposed nationwide class action Settlement Agreement. |
| [41] | Class Counsel offered the following witnesses in support of the settlement: |
| [42] | 1. Michael D. Fishbein, Esquire. Mr. Fishbein's testimony concerned the
litigation background for the Settlement Agreement, the negotiations leading
up to the execution of the Settlement Agreement, and the terms of the Settlement
Agreement. |
| [43] | 2. Robyn J. Barst, M.D.. Dr. Barst is one of the leading experts regarding
primary pulmonary hypertension. The subject of Dr. Barst's testimony concerned
the proper definition of primary pulmonary hypertension under the Settlement
Agreement. |
| [44] | 3. Troyen A. Brennan, M.D., J.D.. Dr. Brennan was offered as an expert
in the fields of public health and epidemiology. |
| [45] | 4. Professor John C. Coffee, Jr.. Professor Coffee is the Adolf A. Berle
Professor of Law at Columbia University Law School. Professor Coffee was
offered as an expert in class certification in the mass tort context. |
| [46] | 5. Molly Kuehn Watson. Ms. Watson is a media planning consultant with
14 years of experience. Ms. Watson testified as an expert in media planning
as it related to class notice. |
| [47] | 6. Professor Arthur R. Miller. Professor Miller is a professor of law
at Harvard Law School. Professor Miller was offered as an expert on issues
related to Federal Rule of Civil Procedure 23. |
| [48] | 7. Harvey S. Rosen, Ph.D.. Dr. Rosen was offered as an expert in the field
of economics. |
| [49] | 8. Eric D. Caine, M.D.. Dr. Caine was offered as an expert witness in
the field of neuropsychiatry, which involves the psychiatric and neuropsychological
symptoms and signs of brain diseases. |
| [50] | 9. Dean G. Karalis, M.D., F.A.C.C.. Dr. Karalis was offered as an expert
in the field of cardiology, valvular heart disease and echocardiography. |
| [51] | 10. Steven N. Goodman, M.D., M.H.S., Ph.D.. Dr. Goodman was offered as
an expert in the design and analysis of epidemiologic and clinical studies,
meta-analysis and methods for making inferences from statistical summaries. |
| [52] | 11. Samuel J. Kursh, D.B.A.. Dr. Kursh serves as vice president of the
Center for Forensic Economic Studies where his responsibilities include
damage modeling and projections in complex litigation. |
| [53] | 12. Kenneth R. Feinberg, Esquire. Mr. Feinberg is an attorney and founder
of the Feinberg Group, LLP, headquartered in Washington, D.C. Mr. Feinberg
was offered as an expert on the resolution of mass tort litigation, particularly
under Federal Rule of Civil Procedure 23. |
| [54] | 13. Professor Sam Dash. Professor Dash is a professor of law at Georgetown
University Law Center. Professor Dash was called to testify as an expert
in the area of legal ethics, particularly as they apply in the class action
context. |
| [55] | 14. Class Counsel also offered other evidence including live testimony
by Peter Pakradooni, a Declaration by Deborah A. Hyland, deposition transcripts,
and a number of exhibits. |
| [56] | AHP offered a number of witnesses, subject to cross-examination, on matters
relevant to the settlement, including: |
| [57] | 15. Sanjiv Kaul, M.D.. Dr. Kaul is a professor of medicine and the Frances
Myers Ball Professor of Cardiology at the University of Virginia where he
is director of its Cardiac Imaging Center. |
| [58] | 16. Pravin Shah, M.D.. Dr. Shah is the medical director of the Hoage Heart
Institute and professor of medicine at Loma Linda University. |
| [59] | 17. Walter F. Stewart, Ph.D., M.P.H.. Dr. Stewart is adjunct associate
professor of epidemiology of Johns Hopkins School of Hygiene and Public
Health, former consultant to the EPA, OSHA, National Cancer Institute, and
the NIH; and a reviewer for the American Journal for Epidemiology, Epidemiology
Review, and the American Journal of Public Health. |
| [60] | 18. Arthur E. Weyman, M.D.. Dr. Weyman is a professor of medicine at Harvard
Medical School, director of the Cardiac Ultrasound Laboratory at Massachusetts
General Hospital, former chief of cardiology at Massachusetts General, president
of the National Board of Echocardiography, former president of the American
Society of Echocardiography, author of the text entitled Echocardiography,
and is board certified in internal medicine and cardiology. |
| [61] | 19. Professor Peter Schuck. Professor Schuck holds the Simeon E. Baldwin
Professorship at Yale Law School. Professor Schuck is a member of the American
Law Institute advisory committee on the Restatement of the Law (Third) of
Torts: General Principles. |
| [62] | 20. Mark McClellan, M.D., Ph.D.. Dr. McClellan holds a Ph.D. in Economics
from the Massachusetts Institute of Technology, an M.D. from the Harvard-Massachusetts
Institute of Technology Division of Health Sciences and Technology, and
an M.A. from the Kennedy School of Government at Harvard University. Dr.
McClellan is an Assistant Professor of Economics and an Assistant Professor
of Medicine at Stanford University, and recently served as Deputy Assistant
Secretary for Economic Policy at the Department of the Treasury. |
| [63] | 21. Elizabeth Krupnick. Ms. Krupnick is an expert in communications and
President of the Farago & Partners advertising agency. Ms. Krupnick's
previous positions in the communications industry include (1) Senior Vice
President of Corporate Communications and Advertising at New York Life Insurance
Company, (2) Chief Communications Officer and Vice President of The Prudential
Insurance Company of America and (3) Senior Vice President of Corporate
Affairs for Aetna Life and Casualty. |
| [64] | Less than thirty class member objectors filed objections to the Settlement
Agreement. No public interest group filed any objection to the Settlement.
No academic filed any objection to the Settlement. Several Objectors cross
examined witnesses at the Fairness Hearing. In addition, some objectors
entered various documents and articles into the Fairness Hearing Record. |
| [65] | D. The Medical Circumstances of the Class |
| [66] | The record before the court includes a substantial amount of medical testimony
and evidence, including approximately ninety clinical and epidemiological
studies, which is the foundation for the various monitoring and compensation
provisions of the Settlement. By contrast, no expert for any party or any
objector testified that any aspect of the Settlement was contrary to the
scientific studies or was not a reasonable response to the medical issues
raised in the lawsuits that the Settlement will resolve. |
| [67] | 1. The Risk of Valvular Heart Disease |
| [68] | a. The Heart |
| [69] | The principal risk created by use of fenfluramine and dexfenfluramine
is the risk of valvular heart disease ("VHD"). The human heart
has four chambers. The upper chamber on the right side of the heart (the
right atrium) functions to receive deoxygenated blood from the body. The
lower chamber of the right side of the heart (the right ventricle) pumps
the deoxygenated blood through the pulmonary arteries into the lungs where
carbon dioxide is removed from the blood and replaced with oxygen. The upper
chamber on the left side of the heart (left atrium) receives and collects
oxygenated blood which has been pumped from the lungs to the heart through
the pulmonary veins. The lower chamber on the left side of the heart (the
left ventricle) pumps oxygenated blood from the heart through the aorta
and into the arterial system. (Ex. P-95 ¶4; Tr. 5/2/00 at 216; Ex. P-63.) |
| [70] | Just as the heart has four chambers, it also has four valves. The valve
structures function to assure that blood moves through the heart in a forward
direction and that effective blood flow is maintained. The valve located
between the right atrium and the right ventricle is the tricuspid valve.
The valve between the right ventricle and the pulmonary artery is the pulmonic
valve. The valve located between the left atrium and the left ventricle
is the mitral valve. The valve located between the left ventricle and the
aorta is the aortic valve. (Ex. P-95 ¶¶ 5 & 6.) |
| [71] | b. VHD in General |
| [72] | VHD is a group of different conditions which cause a disruption in the
normal structure and/or function of the heart valves. When a patient suffers
from VHD, blood that is supposed to move in a forward direction through
the heart leaks backward or "regurgitates" through the diseased
valve. (Ex. P-95 ¶ 8.) The existence of VHD and the extent of regurgitation
associated with it can be diagnosed with echocardiography--a non-invasive
study in which ultrasound waves are used to image cardiac structure and
blood flow in the heart. (Ex. P-95 ¶ 9.) |
| [73] | Apart from VHD related to the use of diet drugs (which is described below),
several other conditions are the principal causes of valvular regurgitation
in the left side of the heart. (Ex. P-95 ¶ 10.) Each of these other conditions
may be diagnosed with an echocardiogram in accordance with accepted, objective
criteria. (Ex. P-95 ¶ 10.) |
| [74] | The prevalence of valvular regurgitation in the general population also
varies with the age of the population--with more regurgitation present in
older individuals as a result of the normal aging process, as well as their
exposure over time to these various diseases or agents that are known to
cause such regurgitation. (Ex. P-95 ¶ 16; AHP Ex. 613 ¶ 9; AHP Ex. 610 ¶
13.) Because there is such a "background" or "control"
rate of valvular regurgitation among the general population who never took
diet drugs--and because that rate varies with the age of the patients and
various other conditions--it is essential that any demonstration of causation
with respect to diet drugs and such regurgitation be predicated on controlled
studies which, on a blinded basis, compare the prevalence of such regurgitation
among those who took the drugs and a similarly-situated population of others
who did not. (AHP Ex. 611 ¶¶ 6-10 & 14-16; AHP Ex. 613 ¶ 18; AHP Ex.
610 ¶¶ 7-9.) |
| [75] | The levels of valvular regurgitation caused by the varying conditions
underlying VHD vary in severity. The degree of valvular regurgitation is
measured by an echocardiogram in accordance with standardized techniques
and criteria. (Ex. P-95 ¶ 11.) Using these techniques of measurement, the
degrees of valvular regurgitation are characterized as trace, mild, moderate
or severe. (Ex. P-95 ¶ 12.) Such valvular regurgitation occurs to varying
degrees in the majority of entirely healthy individuals. As all of the cardiology
experts testified, today's echocardiography technology is so sensitive that
it can detect even trivial amounts of regurgitation that require no medical
treatment and are not a precursor of any disease. (Ex. P-95 ¶ 12; AHP Ex.
613 ¶ 6; AHP Ex. 610 ¶ 11.) |
| [76] | Mild or greater aortic regurgitation ("AR") and moderate or
greater mitral regurgitation ("MR") is frequently referred to
as "FDA positive regurgitation" based on the FDA's observation
that "[m]inimal degrees of regurgitation (i.e., trace mild mitral regurgitation
or trace aortic regurgitation) are relatively common in the general population
and are not generally considered abnormal." (Ex. P-95 ¶ 13; Ex. P-182
at 2 & 6 of 13.) All of the experts who testified on this issue agreed
that the FDA case definition--which has come to be known as "FDA Positive"--is
the appropriate way to define medically relevant valvular regurgitation.
Specifically, all the experts testified that the lesser degrees of regurgitation--including
mild mitral regurgitation--are common in the general population and have
no medical significance. (Ex. P-95 ¶¶ 13, 18; AHP Ex. 613 ¶¶ 6 & 10.) |
| [77] | Although the progression in severity of valvular regurgitation resulting
from conditions other than diet drugs has not been subject to rigorous clinical
investigation, it is generally accepted that VHD from such other causes
is potentially progressive in nature; that is, once significant valvular
regurgitation exists, it tends to beget more severe regurgitation in a significant
subset of patients. (Ex. P-95 at ¶ 14.) Clinical experience tends to suggest
that the risk of progression of valvular regurgitation is related to the
severity of regurgitation in the first instance, with mild forms of regurgitation
tending not to progress, and moderate to severe levels of regurgitation
tending to be progressive. (Ex. P-95 ¶ 15.) Trace AR, trace MR and mild
MR are relatively common conditions, while more severe forms of regurgitation
tend to be less common in the general population. See, e.g., Ex. P-95 ¶
16 (discussing results of Framingham Study). |
| [78] | The existence and degree of symptoms caused by VHD and the medical care
required to manage such disease vary significantly depending upon the degree
of valvular regurgitation that the patient presents. Trace AR, trace MR,
and mild MR are completely asymptomatic conditions that do not impose any
limitations on a patient's ability to function normally. Without some additional
factor, such as impaired mobility of the valve "leaflets," patients
with trace AR, trace MR and mild MR do not require medical management or
treatment. (Ex. P-95 ¶¶ 17 & 18.) |
| [79] | Mild AR is an asymptomatic condition that does not impose any limitation
on an individual's ability to function normally. However, mild AR poses
two distinct health risks. First, the abnormal aortic valve is susceptible
to bacteria introduced into the blood stream through invasive procedures,
such as surgery or normal dental hygiene. This, in turn, creates an increased
risk of the patient suffering an infection of the heart valve and surrounding
heart muscle known as "bacterial endocarditis." Bacterial endocarditis
is an extremely serious and often fatal condition. Patients suffering from
bacterial endocarditis can develop severe regurgitation or peripheral emboli
which, in turn, can lead to stroke, loss of an extremity or major organ
failure. Second, mild AR can progress to more severe levels of valvular
regurgitation that can impair the functioning of the heart. (Ex. P-95 ¶
19; Tr. 5/3/00 at 102-103.) |
| [80] | Given these risks, the accepted regimen of medical management for patients
with mild AR is the prescription of antibiotic prophylaxis in connection
with invasive procedures, such as surgery or normal dental hygiene, and
periodic evaluation by a cardiologist to determine if the degree of valvular
regurgitation in the patient is progressing. (Ex. P-95 ¶ 20.) Typically,
the regimen for following such asymptomatic patients is a yearly examination
by a cardiologist and serial echocardiographic testing. Since the risk of
progression of valvular regurgitation in diet drug-induced VHD is unknown,
an echocardiogram should be performed one year after the diagnosis of valvular
regurgitation is made. If the aortic regurgitation remains mild, then follow-up
echocardiograms should be performed every two to three years to screen for
progressive valvular regurgitation. If the valvular regurgitation is found
to be more severe on follow-up echocardiographic studies, then the echocardiogram
should be performed yearly. (Ex. P-95 ¶ 21.) Mild AR is difficult to appreciate
by merely listening for abnormal heart sounds with a stethoscope (auscultation),
particularly in obese individuals. Because of this, and because of the risks
of endocarditis and progression of asymptomatic disease described above,
many physicians believe that patients who are at risk for developing AR
should receive screening echocardiograms. (Tr. 5/3/00 at 98-99; Ex. P-95
¶ 41.) |
| [81] | At the other end of the spectrum of VHD, severe AR and severe MR are conditions
in which the percentage of blood ejected from the heart (the "ejection
fraction") can fall significantly below normal. With chronic severe
aortic and mitral regurgitation, patients are often asymptomatic at first
and become symptomatic when the heart function begins to fail. (Ex. P-95
¶ 22.) When such patients are symptomatic, their symptoms will include shortness
of breath, fatigue and/or diminished exercise capacity. (Ex. P-95 ¶ 23.) |
| [82] | Severe valvular regurgitation leads to a volume overload of the heart.
The size of the left atrium and/or left ventricle tends to increase in response
to the volume overload created by severe regurgitation. This phenomenon
is described as left ventricular and/or left atrial "dilatation"
("LV/LA"). In addition, the thickness of the walls of the atrium
and/or ventricle also tends to increase in response to the volume overload
created by severe regurgitation. This process is known as left ventricular
hypertrophy and/or left atrial hypertrophy. Over time, heart function will
deteriorate, and as the left ventricular ejection fraction decreases, the
pressure within the left ventricle increases. This, in turn, will lead to
an increase in the pulmonary venous pressures and an increase in the pulmonary
artery pressure. This secondary pulmonary hypertension (PH) is a marker
of significant cardiac dysfunction and may not return to normal even after
valve surgery. In addition, the hypertrophy and dilatation may also be permanent
conditions that may not be corrected medically or surgically following valve
repair or replacement. (Ex. P-95 ¶ 24.) |
| [83] | When dilatation and/or hypertrophy progress to a sufficient level of abnormality,
the patient is exposed to the following risks, among others: |
| [84] | . The patient is at risk of developing chronic atrial fibrillation in
the case of severe MR, that can lead to a stroke or peripheral embolus; |
| [85] | . The patient is at risk of developing ventricular fibrillation or ventricular
tachycardia, dangerous arrhythmias, that can precipitate the patient's sudden
death; |
| [86] | . The patient has a high risk of developing congestive heart failure,
an often fatal condition; and |
| [87] | . The patient is at risk of developing permanent pulmonary hypertension,
that can lead to persistent symptoms of shortness of breath, fatigue, congestive
heart failure and death. (Ex. P-95 ¶ 26.) |
| [88] | Drug therapies can be used in the treatment of severe AR and severe MR,
particularly before the patient develops symptoms, hypertrophy, dilatation
and/or pulmonary hypertension. These include drugs that increase the strength
or the contractility of the heart and drugs that decrease the afterload
of the heart to allow the heart to beat more easily. (Ex. P-95 ¶ 27.) However,
where a patient with severe MR or severe AR exhibits significant symptoms
or begins to exhibit hypertrophy, dilatation and/or pulmonary hypertension
(PH), surgery is usually the treatment of choice. Surgery involves the operative
repair of the diseased valve, if possible, or the replacement of the diseased
valve with either a mechanical valve or a porcine valve. (Ex. P-95 ¶ 28.) |
| [89] | The average cost of valvular repair or replacement surgery, including
both physician and hospital fees, ranges between $30,000-$50,000. (Ex. P-94
at 7-8 of 41.) Valvular repair/replacement surgery in properly selected
patients is a safe procedure. The morbidity/mortality associated with valvular
repair/replacement surgery during the intra-operative and post-operative
period in low risk patients is between 2 and 4 percent, with a long-term
morbidity/mortality for such patients averaging about 3 percent per year.
(Ex. P-95 ¶ 29.) Patients who undergo valve repair or replacement surgery
are normally able to resume their activities of daily living without significant
restriction or disability. (Ex. P-95 ¶ 30.) |
| [90] | However, valvular repair or replacement surgery is not without risk. Patients
who receive metallic prosthetic valves must take blood thinning agents for
the rest of their lives. Patients who receive tissue valves do not require
blood thinners. However, tissue valves are less durable than metallic valves,
and over one-third of patients with tissue valves will have valve failure
within 11 years of surgery. (Ex. P-95 ¶ 31.) Valve repair/replacement surgery
is accompanied by the risk of stroke, peripheral embolus with severe impairment
to the kidneys, abdominal organs, or extremities, renal failure, quadriplegia
or paraplegia resulting from cervical spine injury and post-operative infection.
(Ex. P-95 ¶ 31.) Therefore, the decision to perform valve repair or replacement
surgery involves striking a balance between the risks of surgery and the
risks of severe regurgitation. (Ex. P-95 ¶ 32.) |
| [91] | As Dr. Brennan, a public health expert and board-certified internist,
testified--and as is well-accepted in the medical literature--the use of
echocardiograms to screen and monitor patients who are at some increased
risk of developing valvular regurgitation should further reduce the morbidity
and mortality associated with possible progression and complications of
the disease (which takes years to injure a patient's heart after it can
be detected on an echocardiogram) as compared to patients who are not so
screened and monitored. Specifically, a higher-risk population that is screened
and monitored in this fashion can be treated--either through medication,
valve repair or replacement--at the optimal time to reduce the likelihood
that they will suffer permanent heart damage or other complications of unchecked
valve disease. No expert testified to the contrary. (Tr. 5/3/00 at 101-104,
114-116.) |
| [92] | Given the above, the regimen to be followed in the management of patients
suffering from severe AR and severe MR consists of: |
| [93] | 1. prescribing antibiotic prophylaxis in connection with any invasive
procedures, such as surgery or dental hygiene; |
| [94] | 2. frequent examination and evaluation of the patient by a cardiologist,
including frequent use of echocardiograms, to assess the degree of regurgitation,
the presence and extent of LV/LA dilatation, the presence and extent of
LV/LA hypertrophy, the patient's ejection fraction, the patient's pulmonary
artery pressure, the patient's symptom status and other cardiovascular parameters; |
| [95] | 3. treatment with medication; and |
| [96] | 4. surgery, where indicated. (Ex. P-95 at ¶ 33.) |
| [97] | Finally, moderate MR and moderate AR are asymptomatic conditions that
do not impair an individual's ability to function normally. Typically, these
conditions pose the same risk and require the same regimen of medical management
as that which is appropriate for the management of mild AR. However, when
moderate MR and/or moderate AR approach the level of severe regurgitation,
the patient can begin to develop PH, LV/LA dilatation, and LV/LA hypertrophy.
When such conditions develop, it is appropriate to treat the patient in
the same manner as one would treat a patient who had severe regurgitation
with such findings. (Ex. P-95 ¶ 34.) c. VHD and Diet Drugs |
| [98] | The relationship between the ingestion of the fenfluramine derivatives
and VHD has been subject to extensive scientific investigation. Since the
withdrawal of Pondimin and Redux from the market in September 1997, a number
of investigators have conducted controlled studies that have compared the
prevalence of valvular regurgitation among patients who previously took
fenfluramine, dexfenfluramine or the Fen/Phen combination to similarly situated
subjects (i.e., matched controls) who had not taken diet drugs. There are
14 principal studies and a number of other investigations that studied a
total of more than 12,000 patients who took fenfluramine and/or dexfenfluramine
for varying lengths of time. (Exs. P-113, P-127, P-170, P-172, P-173, P-122,
P-115, P-153, P-228, P-111, P-118, P-119, P-126, P-138, P-148 & P-149.)
As stated in a February 1999 Review article that summarized a number of
these studies, "Fenfluramine and more recently its d-isomer Dexfenfluramine
have been the most extensively studied anorexic drugs for the past 30 years."
(Dunn LT 84 at 123.) Although these studies vary in their design, each is
a valid scientific study supported by the undisputed expert testimony as
reliable and authoritative. |
| [99] | As a result of the unprecedented amount of study that diet drug-related
valvulopathy has received, it is possible to reach reliable conclusions
regarding the nature of the disease process, the effect of duration of use,
latency, progression, incidence and prevalence. It appears clear that the
fenfluramine derivatives, Pondimin and Redux, cause valvular heart disease
by producing plaques that become "stuck-on" to the valve structures
causing regurgitant lesions. (Ex. P-113.) Equally clear is that there is
a duration-response relationship between exposure to the drugs and the development
of regurgitant lesions. An enormous body of epidemiologic data from the
authoritative, reliable studies described above establishes with a high
degree of confidence that the population of patients who took fenfluramine
and/or dexfenfluramine for less than three months does not have a significant
increased risk of FDA Positive levels of valvular regurgitation. (Tr. 5/3/00
at 93-96; Ex. P-90 ¶ 5; Tr. 5/8/00 at 24; Ex. P-122; AHP Ex. 587A; Ex. P-115;
Ex. P-228; Ex. P-170.) |
| [100] | Moreover, although short-term therapy with Pondimin or Redux was reported
to produce an increased risk when both FDA Positive and non-FDA levels of
regurgitation were considered, there was no longer a significant difference
between exposed and control subjects when the same population was re-evaluated
3 to 5 months after discontinuation of the use of the drugs and again at
one year after discontinuation. (Exs. P-172 & P-173.) In contrast, there
is epidemiologic evidence that the use of fenfluramine or dexfenfluramine
for durations of three to six months or longer produces a significant increased
risk of FDA Positive levels of regurgitation and that this risk increases
in proportion to the duration of therapy. (Ex. P-90 ¶ 5; Tr. 5/5/00 at 24;
Tr. 5/3/00 at 96.) |
| [101] | With respect to the levels of regurgitation which the FDA has defined
as medically relevant ("FDA Positive"), the studies are consistent
in finding that the only increased risk of such regurgitation among patients
who previously took fenfluramine or dexfenfluramine is a risk of mild aortic
regurgitation, and that such increased risk does not occur until patients
took the drugs for a "threshold" duration of three to six months
or more. (Tr. 5/3/00 at 94-95; AHP Ex. 609 ¶ 8; Tr. 5/8/00 at 78-79; AHP
Ex. 611 ¶ 17; AHP Ex. 610 ¶ 10.) All of the other clinical studies are consistent
with this durational finding with respect to the association between FDA
Positive aortic regurgitation and the use of the drugs. Specifically, in
the Ryan-Jollis, Weissman I, Weissman II, Weissman III, Gardin I, Gardin
II and Davidoff Studies, there was no statistically significant increase
in the prevalence of FDA Positive aortic regurgitation among the patients
who had taken fenfluramine, dexfenfluramine, or the fen-phen combination
for three months or less. (AHP Ex. 174A at Table 2; AHP Ex. 175 at 10; P-170
at Tables 1 and 2; P-172 at Tables 1 and 2; AHP Ex. 185A at Tables 1-4;
P-122 at 1706; AHP Ex. 587A; AHP Ex. 121 at 11, 20 & 28; Tr. 5/3/00
at 94-95; AHP Ex. 609 ¶ 8; Tr. 5/8/00 at 78-79; AHP Ex. 611 ¶ 17; AHP Ex.
610 ¶ 10.) |
| [102] | With respect to the relative prevalence of mitral regurgitation, the controlled
clinical studies do not demonstrate a statistically significant increased
risk of FDA Positive (moderate or greater) mitral regurgitation regardless
of duration of use. For example, the Ryan-Jollis Study found that--in comparison
to a background rate of 2 percent of FDA Positive mitral regurgitation among
the untreated control subjects--none of the patients treated with the fen-phen
combination for 90 days or less, 2 percent of the patients treated for 90
to 180 days, 3 percent of the patients treated 181 to 360 days, 3 percent
of the patients treated 361 to 720 days, and 2 percent of the patients treated
for 720 days or more had such regurgitation. None of these slight differences
was statistically significant for any of the durational subgroups, nor was
the rate of FDA Positive mitral regurgitation among all of the treated patients
taken as a whole (2.5 percent) significantly different from the control
rate of 2 percent. (AHP Ex. 175 at 12.) |
| [103] | All of the other controlled clinical studies similarly found that there
was no statistically significant increased risk of FDA Positive (moderate
or greater) mitral regurgitation among patients treated with fenfluramine,
dexfenfluramine, or the fen-phen combination, regardless of duration of
use. (Exs. P-153 at 2163; P-130 at Table 2; P-170 at Table 2; P-172 at Table
2; AHP Ex. 185A; P-122 at 1707; AHP Ex. 587A; AHP Ex. 121 at 13; AHP Ex.
609 ¶ 8; AHP Ex. 611 ¶ 18; AHP Ex. 610 ¶ 10.) None of the clinical studies
have reported an increased risk of either tricuspid or pulmonic regurgitation
among patients treated with fenfluramine or dexfenfluramine regardless of
duration of use. (Exs. P-170, P-115, P-111 and P-122.) |
| [104] | All of the expert witnesses who testified in this case and expressed an
opinion with respect to the increased risk of medically significant valvular
regurgitation likewise agreed that increased risk among former fenfluramine
or dexfenfluramine patients is limited to the aortic valve and begins at
a "threshold" level of at least three months or more. No expert
testified to the contrary. (Tr. 5/3/00 at 93-95; AHP Ex. 609 ¶ 8; AHP Ex.
613 ¶¶ 43-58; AHP Ex. 611 ¶¶ 17-32; AHP Ex. 610 ¶ 10.) |
| [105] | The state of scientific knowledge concerning diet drug induced valvular
heart disease was recently summarized by a prominent pharmaco-epidemiologist,
Hershel Jick, in a recent editorial in the Journal of the American Medical
Association as follows: |
| [106] | [m]illions of patients were prescribed Fenfluramines prior to 1997. For
the substantial majority who took the drug for less than three months, the
risk of heart valve disorders appears to be minimal. In those who took the
drugs longer than three months, many will have developed echocardiographic
evidence of cardiac valve disorders, particularly mild AR. In the majority
of instances, these abnormalities most likely are benign and are unlikely
to lead to clinical disease. However, a small proportion of patients have
substantially increased risk for clinically important valvulopathy and cardiovascular
consequences as a result of taking anorexigens. However, because Fenfluramines
have been unavailable since 1997, judgments about the overall consequences
of Fenfluramine use are likely to be limited to the results of those studies
already completed. Ex. P-128 at 2-3. |
| [107] | In sum, the medical situation of individuals who used AHP's products,
Pondimin and Redux, is as follows. First, because the population of individuals
who took diet drugs for more than three or four months is at an increased
risk of asymptomatic valvular heart disease, it is appropriate for them
to have a screening echocardiogram to determine if they have developed VHD
as a consequence of exposure to Pondimin and Redux. Second, to the extent
that diet drug recipients manifest FDA Positive levels of regurgitation,
they require antibiotic prophylaxis and ongoing medical surveillance to
determine if there is progression in their condition such that further medical
treatment or intervention is appropriate. (Tr. 5/3/00 at 102-103.) Finally,
if diet drug recipients have or develop serious levels of regurgitation
(defined as either severe regurgitation or moderate regurgitation with dilatation,
hypertrophy, reduced ejection fraction, or pulmonary hypertension) then
such individuals suffer disabling conditions for which substantial compensation
is warranted. |
| [108] | 2. The Risk of Primary Pulmonary Hypertension ("PPH") |
| [109] | PPH is a disease that affects pulmonary circulation. PPH is characterized
by scarring and fibrosis of the pulmonary arteries which carry deoxygenated
blood from the right side of the heart to the lungs. This scarring prevents
the blood cells from effectively absorbing oxygen as they pass the alveoli
in the lungs. Moreover, the scarring within the pulmonary arteries obstructs
the flow of blood within the vessels, causing the blood pressure in the
pulmonary arteries pressure to rise. The right ventricle of the heart attempts
to overcome the increasing resistance to the flow of blood through the pulmonary
arteries by growing larger and more muscular. Ultimately, this dilatation
and hypertrophy of the right ventricle will cause the heart to fail and
result in the patient's death. (Tr. 5/2/00 at 223-27 & 231-32.) |
| [110] | PPH is a relentlessly progressive disease that leads to death in virtually
all circumstances. The only approved treatment for the disease involves
the administration of a drug known as Prostacyclin ("Flolan"),
which must be administered continuously through an intravenous pump. Flolan
is not a cure for the disease. If it is used successfully, it can reduce
the patient's symptoms and delay death for a few years. Administration of
the drug is accompanied by a high incidence of serious complications. The
drug can cause death if administered to patients who do not suffer from
PPH, and is thus contraindicated for use in such patients. (Tr. 5/2/00 at
237-245.) |
| [111] | The proper diagnosis of primary pulmonary hypertension is extremely important
for two reasons. First, the diagnosis is accompanied by enormous psychological
trauma to the patient because it is a virtual death sentence. Second, proper
diagnosis is important because the treatment administered as a result of
the diagnosis is extraordinarily dangerous in patients who do not, in fact,
suffer from the disease. (Tr. 5/2/00 at 236-38, 242-43.) |
| [112] | The community of physicians with expertise in diagnosing and treating
PPH have repeatedly reached a consensus concerning the appropriate criteria
for diagnosing and defining the disease. This consensus was expressed at
the World Health Organization meeting in 1973, in a statement of the American
College of Chest Physicians in 1993 and in the Executive Summary of the
World Symposium on Primary Pulmonary Hypertension in 1998. In addition,
this "consensus definition" of PPH was expressed in every major
epidemiologic study concerning the disease that has ever been done. The
consensus for defining and diagnosing PPH has three elements. The first
of the three criteria necessary to make a diagnosis of primary pulmonary
hypertension is a mean pulmonary artery pressure ò 25 mm Hg at rest or ò
30 mm Hg with exercise as measured at cardiac catheterization. *fn2
(Tr. 5/2/00 at 230-31, 254-55, 259-62, 265 & 268-69; Tr. 5/3/00 at 13.) |
| [113] | There are many conditions aside from PPH that can cause an elevation in
pulmonary artery pressure. These include systemic hypertension (i.e., "high
blood pressure") and a variety of diseases which affect the left side
of the heart including cardiomyopathy, mitral stenosis, pulmonary vein obstruction,
a stiff left ventricle, and like conditions. Because PPH is a disease that
originates in the pulmonary arterial system, patients with the disease will
have normal pressures in the left side of their heart even though they have
abnormal pressures in the right side of their heart. In contrast, patients
who have conditions other than PPH that result in an elevated pulmonary
artery pressure will have an elevation in the "pulmonary capillary
wedge pressure" which accurately reflects the pressure in the left
atrium. The only way to measure pulmonary capillary wedge pressure is through
a cardiac catheterization. Accordingly, the second criterion necessary for
the diagnosis and treatment of PPH is the presence of a "normal"
pulmonary capillary wedge pressure of ó 15 mm Hg. (Tr. 5/2/00 at 230-31,
258-62, 266, 268-69 & 279-80; Tr. 5/3/00 at 13, 53-54.) |
| [114] | Finally, PPH is a diagnosis of exclusion. Therefore, in order to reach
the diagnosis, all "secondary" causes of pulmonary hypertension
must be excluded. These include diseases known to be associated with pulmonary
hypertension such as collagen vascular disease, congenital systemic to pulmonary
shunts, portal hypertension, toxin-induced lung disease, significant obstructive
sleep apnea, interstitial fibrosis (such as silicosis, asbestosis, or granulomatous
disease), HIV infection and others. (Tr. 5/2/00 at 17, 19-20.) |
| [115] | The normal incidence of PPH in the population is 1 to 2 new cases per
million people per year. Two well done epidemiologic studies establish that
the use of fenfluramine and dexfenfluramine cause PPH. (Exs. P-209 &
P-175.) In 1996, Dr. Abenhaim and his colleagues published the results of
the International Primary Pulmonary Hypertension Study. This study demonstrated
that the risk of developing PPH in individuals who used fenfluramine longer
than three months increased twenty-three fold. (Ex. P-209.) In March of
2000, the journal CHEST published the results of an epidemiologic study
entitled the Surveillance of North American Pulmonary Hypertension. This
study confirmed the association between the use of fenfluramine derivatives
and PPH. (Ex. P-175.) |
| [116] | E. The Legal Circumstances of the Class |
| [117] | Diet drug recipients have faced and will continue to face significant
legal obstacles in obtaining appropriate relief. First, the statutes of
limitation in various states pose significant obstacles to recovery. Most
jurisdictions have a "discovery rule," which holds that an individual
must commence suit within a specified period of time after he or she knows,
or in the exercise of reasonable diligence, should have known that they
have suffered an injury and that it was caused by the defendant. See e.g.,
Pearce v. Salvation Army, 674 A.2d 1123, 1125 (Pa. Super Ct. 1996); Cochran
v. GAF Corp., 666 A.2d 245 (Pa. 1995); HECI Exploration Co. v. Neel, 982
S.W.2d 881, 886 (Tex. 1998). Pondimin and Redux were withdrawn from the
market in September 1997 accompanied by an unprecedented amount of publicity
which effectively warned diet drug users that they may have developed valvular
lesions which could be detected through non-invasive echocardiograms. Also,
these lesions are not latent. If they are going to occur, they are going
to occur during drug use (or shortly thereafter) and be demonstrable on
echocardiogram. Therefore, AHP has an argument that diet drug users, acting
with reasonable diligence, should have learned that they had heart valve
damage as a result of using Pondimin and Redux beginning with the withdrawal
of the drugs from the market in September 1997. Since most states have statutes
of limitation of two years or less, AHP could argue that the statute of
limitations has run on claims of valvular heart damage by most diet drug
recipients. Even though there are approximately 18,000 individuals who have
commenced actions against AHP, at present this means that a substantial
number of viable claims by diet drug recipients could be time-barred. (Tr.
5/2/00 at 34-35.) |
| [118] | Moreover, because of vagaries in the law governing recovery for potentially
progressive injuries, the damage claims of individuals who are not presently
suffering from serious diet drug-induced VHD are potentially subject to
the following types of resolution by the courts: |
| [119] | 1. many courts may hold that such plaintiffs are not entitled to any recovery
of damages at the present time because they do not have a "symptomatic"
injury, but that a cause of action will accrue in the future without a statute
of limitations time bar if their disease progresses to a symptomatic level; |
| [120] | 2. many courts may hold that plaintiffs can recover compensatory damages
for asymptomatic valve disease today and that a separate cause of action
may accrue in the future, without a statute of limitations time bar, in
the event that their disease progresses to a more serious level; and |
| [121] | 3. many jurisdictions may hold that claimants can recover compensatory
damages for their asymptomatic valvular heart disease at the present time,
but will never recover for the risk of future progression because that risk
is too speculative, does not meet "more likely than not" standards,
and/or because valvular heart disease is not subject to a "two disease"
rule that recognizes the accrual of two separate causes of action where
there are more serious manifestations of an underlying disease process.
(Tr. 5/2/00 at 34-35.) |
| [122] | Thus, it would be beneficial for diet drug recipients to obtain appropriate
legal protections such that they have a viable claim for relief when, as,
and if, they discover they have either FDA Positive levels of regurgitation
or that they have serious VHD. |
| [123] | F. The Settlement |
| [124] | 1. The Class |
| [125] | On October 12, 1999, a complaint entitled Brown v. American Home Products
Corporation was filed in this action. (Class Action Compl. Ex. P-1; Am.
Class Action Compl. Ex. P-2; Second Am. Class Action Compl. Ex. P-65.) The
Brown Complaint was filed as a vehicle for combining the claims of class
members asserted in pending federal and state diet drug litigation throughout
the country into a single complaint to facilitate class action treatment
of those claims for settlement purposes. (Tr. 5/2/00 at 56-57.) The Settlement
Agreement was reached with respect to a class consisting of all persons
in the United States who ingested Pondimin and Redux and their associated
consortium claimants. (Ex. P-3 at 19 of 148.) The class includes five discrete
subclasses: |
| [126] | Subclass 1(a): those class members who took Pondimin or Redux for 60 days
or less and who have not been diagnosed as having FDA Positive levels of
valvular regurgitation by September 30, 1999; |
| [127] | Subclass 1(b): those class members who ingested Pondimin or Redux for
61 days or more and who, likewise, have not been diagnosed as having FDA
Positive levels of valvular regurgitation as of September 30, 1999; |
| [128] | Subclass 2(a): those class members who ingested Pondimin or Redux for
60 days or less and who have been diagnosed as having FDA Positive levels
of valvular regurgitation as of September 30, 1999; |
| [129] | Subclass 2(b): those class members who ingested Pondimin or Redux for
61 days or more and who have been diagnosed as having FDA Positive levels
of valvular regurgitation by September 30, 1999; and |
| [130] | Subclass 3: those class members who ingested Pondimin or Redux and who
are not FDA Positive but who have been diagnosed as having Mild Mitral Regurgitation.
(Ex. P-3 at 19-21 of 148.) |
| [131] | 2. The Benefits of the Settlement |
| [132] | a. Medical Monitoring, Medical Screening and Matrix Compensation Benefits |
| [133] | The Settlement Agreement provides that all persons who took diet drugs
for 61 days or more who were not diagnosed as "FDA Positive" by
September 30, 1999 (i.e., members of Subclass 1(b) as defined above) are
entitled to receive a state-of-the-art transthoracic echocardiogram and
a consultation with a cardiologist concerning the results of that echocardiogram.
(Ex. P-3 at 34 of 148.) The Settlement Agreement makes certain provisions
for members of Subclass 1(a) (those who took diet drugs for 60 days or less)
to obtain monitoring relief in certain circumstances. In particular, members
of Subclass 1(a) are entitled to recover the net out-of-pocket costs which
they incur for echocardiograms conducted during the screening period if
they are diagnosed as having FDA Positive valvular regurgitation. (Ex. P-3
at 35-36 of 148.) In addition, the Settlement Trustees may, at their discretion
and in appropriate cases for compassionate and humanitarian reasons, provide
a transthoracic echocardiogram and an associated interpretive physician
visit for members of Subclass 1(a). *fn3
(Ex. P-3 at 36 of 148.) In addition, the Settlement Agreement provides that
members of Class 1(a) and 1(b) can obtain echocardiograms upon trial court
approval of the settlement in the case of financial hardship. *fn4
(Ex. P-3 at 37 of 148; Ex. P-32 at 2 of 13.) |
| [134] | The period of time provided during which echocardiograms described in
the foregoing findings are to be completed under the terms of the Settlement
Agreement (the "Screening Period") is 12 months from the date
on which the settlement receives "Final Judicial Approval." As
defined in the Settlement Agreement, Final Judicial Approval refers to the
approval of the Settlement Agreement as a whole by the district court and
such approval becoming final by the exhaustion of all appeals, if any, without
substantial modification of the order or orders granting such approval.
The court may extend the Screening Period for an additional six months for
cause shown. (Ex. P-3 at 10 & 12 of 148.) Class members who wish to
receive the medical monitoring benefits described above must register to
receive such benefits by Date 1, which is 210 days after the date of Final
Judicial Approval. (Ex. P-3 at 9 & 34-36 of 148.) |
| [135] | The medical monitoring benefits are to be furnished free of charge by
a Trust Fund established under the Settlement Agreement as described in
greater detail below. (Ex. P-3 at 34-36 of 148.) It is expected that the
Trust will contract with a network of approximately 10,000 board certified
or board eligible cardiologists located throughout the country who are qualified
to perform and interpret echocardiograms and to consult with patients concerning
the results of those echocardiograms. (Tr. 5/2/00 at 69; Tr. 5/9/00 at 25-31.)
This network will be sufficiently extensive to provide class members with
the opportunity to choose among several conveniently located cardiologists
to perform the monitoring services provided by the Settlement Agreement
regardless of whether class members reside in a rural or urban setting.
(Tr. 5/2/00 at 69; Tr. 5/9/00 at 25-31.) It is expected that, on average,
the Trust's cost to provide an echocardiogram and interpretive physician
visit pursuant to the Settlement Agreement will average approximately $800
per class member. (Tr. 5/2/00 at 69; Tr. 5/9/00 at 31.) |
| [136] | Each class member who is diagnosed as having Mild Mitral Regurgitation
by the end of the screening period and who registers as such by a date which
is 120 days after the end of the Screening Period (defined in the Settlement
Agreement as "Date 2") will be entitled to recover compensatory
damages pursuant to a settlement "matrix" in the event that they
develop serious levels of mitral regurgitation by the year 2015, or, alternatively,
each such person may exercise a "back-end opt-out." (Ex. P-3 at
38-56 & 61-63 of 148.) With respect to any class member who properly
and timely exercises a right of back-end opt-out, AHP may not raise a defense
based on a statute of limitations or repose or a defense based on improper
splitting of a cause of action. By the same token, any class member exercising
a back-end opt-out may not recover punitive, exemplary or multiple damages
against AHP, and may not use any prior verdicts or judgments against AHP
under the doctrines of collateral estoppel, res judicata, or other doctrine
of issue or claim preclusion. (Ex. P-3 at 61-63 of 148.) |
| [137] | If a class member learns that he or she has FDA Positive levels of regurgitation
after September 30, 1999 but before the end of the Screening Period, that
individual has the right to opt out of the settlement and to pursue a claim
for compensatory damages in the tort system without meeting the bar of the
statute of limitations or a defense of splitting of causes of action and
without relying on any prior verdicts or judgment against AHP under the
doctrines of collateral estoppel, res judicata, or other doctrine of issue
or claim preclusion. This "intermediate opt-out" right is in addition
to the initial opt-out right of all class members. (Ex. P-3 at 57-60 of
148.) |
| [138] | Those individuals who have FDA Positive levels of regurgitation but do
not exercise an initial or intermediate opt-out right have the right to
receive medical services from the Settlement Trust to the extent appropriate
to monitor their VHD. Such services may include periodic medically appropriate
echocardiograms, cardiology consultations, chest x-rays, laboratory studies,
electrocardiograms and other services necessary and appropriate to determine
the cardiac status of individuals who have FDA Positive levels of valvular
regurgitation. (Ex. P-3 at 38 of 148.) Class members may elect to receive
cash in lieu of the provision of such services. For class members who took
diet drugs 61 or more days and who have FDA Positive levels of regurgitation,
the settlement provides that they shall receive $10,000 in medical services
or $6,000 in cash. For class members who took AHP's diet drugs for 60 days
or less, the agreement provides that they shall receive $5,000 in medical
services or $3,000 in cash. *fn5
(Ex. P-3 at 34-36 & 38 of 148.) |
| [139] | Finally, if class members with FDA Positive levels of regurgitation progress
to serious levels of VHD by the year 2015, they will have a right, as such
conditions occur, to receive compensation pursuant to the terms of the settlement
matrices or to exercise a "back-end opt-out" and pursue their
claim for compensatory damages (but not punitive damages) in the tort system
without any time bar or other defense arising from a statute of limitations,
a statute of repose or the like. (Ex. P-3 at 38-56, 61-63 of 148.) Class
members who progress to more serious levels of valvular heart disease have
the right to "step up" to higher amounts of compensation as those
levels occur pursuant to the settlement matrices. (Ex. P-3 at 38-56 of 148.) |
| [140] | There are four matrices under the settlement. Matrix A-1 describes the
compensation available to diet drug recipients with serious VHD who took
diet drugs for 61 days or longer, who are registered as having FDA Positive
levels of valvular regurgitation by Date 2 and who do not have any of the
alternative causes of VHD that make the B matrices applicable. (Ex. P-3
at 39-55 of 148.) Matrix A-2 describes the compensation available to spouses,
parents, children and significant others of diet drug recipients entitled
to compensation on Matrix A-1. (Ex. P-3 at 39-55 of 148.) |
| [141] | Matrix B-1 describes the compensation available to class members with
serious VHD who were registered as having only Mild Mitral Regurgitation
by the close of the Screening Period, or who took diet drugs for 60 days
or less, or who have factors that would make it difficult for them to prove
that their VHD was caused by the use of diet drugs. Id. These conditions
include most conditions that are objectively identifiable as causes of VHD
independent of the use of diet drugs. (Ex. P-3 at 39-55 of 148.) Matrix
B-2 describes the compensation available to the spouses, parents, children
and significant others of those entitled to compensation on Matrix B-1.
(Ex. P-3 at 39-55 of 148.) |
| [142] | The matrices are composed of cells formed by the intersection of five
separate matrix levels of severity and 11 separate age intervals ranging
from diet drug recipients who are less than or equal to 24 years old to
diet drug recipients who are 70 to 79 years of age. Generally, the amount
of compensation provided by the matrices decreases with age both because
younger individuals have a longer damage period and because, as discussed
above, age increasingly confounds the effects of diet drugs in producing
valvular regurgitation. (Tr. 5/2/00 at 76-77.) |
| [143] | The levels of VHD described on the settlement matrices correspond with
the medical consensus regarding the stages of serious VHD. Level I describes
those individuals who either have severe regurgitation or have suffered
bacterial endocarditis. Level II describes those individuals with moderate
to severe regurgitation who have evidence of changes in their cardiac status
such as hypertrophy, dilatation, reduced ejection fraction, pulmonary hypertension
and the like. Level III describes those individuals who have or need valvular
repair or replacement surgery. Level IV describes those individuals who
suffer from either complications of valvular surgery or whose disease has
progressed to the point that surgery is not an effective remedy. Level V
describes those individuals whose VHD is so far advanced that it is terminal.
(Ex. P-95 ¶ 48; Ex. P-3 at 40-50 of 148.) Each cell formed by the intersection
of an age interval with a severity level describes the amount of compensation
to which a claimant meeting those criteria is entitled. |
| [144] | Class members do not have to demonstrate that their injuries were caused
by ingestion of Pondimin and Redux in order to recover Matrix Compensation
Benefits. Rather, the Matrices represent an objective system of compensation
whereby claimants need only prove that they meet objective criteria to determine
which matrix is applicable, which matrix level they qualify for and the
age at which that qualification occurred. (Ex. P-3 at 38-56.) |
| [145] | In addition, the amounts specified by each cell of each matrix will be
increased by 2% per year to provide protection against inflation for individuals
who qualify for such payments in the future. This two percent increase is
sufficient protection against inflation given the historical annual rate
of change in the consumer price index. (Tr. 5/2/00 at 78; Ex. P-3 at 55-56
of 148; Ex. P-94 at 3 of 41.) Under the Settlement Agreement, the determination
of a matrix benefit is not subject to the exercise of discretion by the
Administrators of the Settlement or by any court. Rather, benefits determinations
are based on the sworn certification of a board certified physician--primarily
a board certified cardiologist or cardiothoracic surgeon--that a class member
either has or does not have each of the conditions applicable under the
settlement matrices. (Tr. 5/2/00 at 79; Ex. P-3 at 101-02 of 148.) In order
to prevent fraud, the settlement requires the Trustees to perform a quarterly
audit of five percent of the total claims for Matrix Compensation Benefits
in accordance with a plan of audit adopted by those responsible for administration
of the settlement. In addition, the settlement permits AHP to submit additional
claims for quarterly audit of up to 10% of the matrix claims submitted and
10% of the non-matrix claims submitted. *fn6
(Ex. P-278 ¶ 31.) The audit procedure requires those responsible for administration
of the settlement to gather all medical records relevant to the audited
claim and forward them to a highly qualified independent board certified
cardiologist who is responsible for making a determination as to whether
or not there was a reasonable medical basis for the representations made
by any physician in support of the claim. (Ex. P-3 at 111-15 of 148.) If
the auditing cardiologist makes the determination that there was a reasonable
medical basis to support the class member's claim and there is no substantial
evidence that fraud was committed in connection with the claim, the claim
is to be allowed. Id. If not, those responsible for the administration of
the settlement are required to apply to the court for relief. Id. The relief
available to the court upon such an application includes an order disallowing
the claim, an order directing an additional audit of other claims involving
the same attorney and/or physician who was involved in the claim, an order
directing such other additional audits as may be appropriate, an order imposing
penalties including the payment of costs and attorneys fees and an order
making a referral of the matter to the United States Attorney or other appropriate
law enforcement officials for criminal prosecution if there is probable
cause to believe that the claim was submitted fraudulently. Id. |
| [146] | b. Prescription Reimbursement Benefits |
| [147] | The average Redux prescription cost $54.82 per month. The average Pondimin
prescription cost $29.22 per month. Class members arguably had a right to
recover these prescription costs under the consumer fraud theories advanced
in many jurisdictions. Under the Settlement Agreement, class members who
took diet drugs for 60 days or less have the right to receive reimbursement
of the costs of purchasing Pondimin and/or Redux at the rate of $30 per
month for prescriptions of Pondimin and $60 per month for prescriptions
of Redux. Eligible class members must register for this benefit by Date
1. (Ex. P-3 at 35 of 148.) Class members who took diet drugs for 61 days
or more have the right to receive reimbursement for the cost of their Pondimin
and/or Redux prescriptions, subject to a maximum payment of $500 and further
subject to the availability of money within Fund A after payment of all
other benefits. Eligible class members must register for this benefit by
Date 1. (Ex. P-3 at 35 of 148.) |
| [148] | c. Reimbursement of Echocardiogram Expenses |
| [149] | Under the consumer protection laws of many states, class members arguably
had the right to recover the cost of echocardiograms which they incurred
as a consequence of their exposure to Pondimin and Redux. Under the Settlement
Agreement, class members have the right to be reimbursed the net out-of-pocket
expenses of obtaining echocardiograms outside of the medical monitoring
program subject to the availability of money within Fund A after payment
of all other benefits except prescription reimbursement benefits for those
who took diet drugs 61 days or longer. Eligible class members must register
for this benefit by Date 1. (Ex. P-32 ¶ 2.) |
| [150] | d. Establishment of a Medical Research Fund |
| [151] | The Settlement Agreement requires the establishment of a $25 million fund
to be used to finance medical research and education related to heart disease.
Specifically, the settlement requires the creation of a non-profit corporation
named the "Cardiovascular Medical Research and Education Fund"
to be managed by a Board of Directors consisting of seven persons. Twenty
five million dollars in Settlement Funds are to be provided to the corporation.
The corporation is required to solicit proposals for grants to physicians,
scientists, researchers, healthcare providers and others for purposes of
performing medical research or providing medical education concerning heart
disease which will be beneficial to the settlement class. The corporation
may provide individual grants not to exceed $2 million in response to such
proposals upon a finding that the research or educational proposal made
by the grant applicant will benefit the members of the class and the grant
applicant undertakes, in writing, to submit the results of any research
conducted pursuant to any grant proposal for publication by a peer reviewed
journal. (Ex. P-3 at 36-37 of 148; Ex. P-7.) |
| [152] | e. Establishment of a Registry/Database |
| [153] | In order to obtain benefits under the Settlement Agreement, all class
members must submit one of several claim forms which requires: (1) basic
personal information including the age and gender of the claiming class
member; (2) information about both the use of Pondimin and Redux and the
period of time during which it was used; (3) if the claim is based, in whole
or in part, on the results of an echocardiogram, a copy of both the report
of the echocardiogram and the videotape or computer disk on which the image
of the echocardiogram is stored; and (4) if the claimant is making a claim
for matrix benefits, relevant information from a board certified cardiologist
on the claimant's condition and certain medical records. (Ex. P-3 at 87-91
of 148; Exs. P-12, P-17, P-24 & P-25.) Class members may either furnish
the requested information directly or have the Settlement Administrators
obtain it through execution of appropriate authorizations. (Ex. P-3 at 87-91
of 148; Exs. P-12, P-17, P-24, & P-25.) |
| [154] | This information is to be recorded in a computerized database suitable
for use with standard medical research software and maintained as a "registry"
for purposes of administering the settlement and for purposes of medical
education and research. (Ex. P-3 at 91-95 of 148.) After redaction of all
patient identifying information, the registry/database is to be made available
to persons who: (1) provide written proof of their training, qualifications
and experience to conduct medical research; (2) provide a research protocol
setting forth the purposes for which they seek access to the registry, the
research methodology, source of funding and a description of how the proposed
research will benefit the settlement class; (3) undertake, in writing, to
use the information they receive from the registry solely for medical, scientific
and educational purposes; (4) undertake upon completion of the research
to provide the Settlement Administrators, the court, AHP and Class Counsel
with a copy of any publication based in whole or in part on the information
contained in the registry; and (5) undertake not to testify at any time
on behalf of any party in any lawsuit relating to the use of Pondimin and/or
Redux. (Ex. P-3 at 91-95 of 148.) |
| [155] | f. The Public Health Benefits of the Settlement |
| [156] | The benefits provided by the Settlement Agreement will significantly contribute
to the protection and advancement of the public health. Specifically, the
provision of screening echocardiograms under the settlement will allow for
early diagnosis of individuals with asymptomatic VHD. Such early diagnosis
will permit these individuals to receive antibiotic prophylaxis when having
dental and surgical procedures, thereby minimizing the risk they would otherwise
have of suffering from bacterial endocarditis. Moreover, early diagnosis
of asymptomatic VHD together with the medical surveillance benefits offered
by the settlement will allow patients to be carefully monitored over time
to determine if the level of regurgitation attributable to their valve disease
is progressing. This will permit these individuals to obtain medical and
surgical treatment of their valve disease before they suffer irreversible
injuries to their heart such as dilatation, hypertrophy, reduced ejection
fraction and secondary pulmonary hypertension. In addition, the medical
research and medical registry provisions of the Settlement Agreement provide
a means to conduct extensive research with respect to the diagnosis and
treatment of VHD in general and diet drug induced valvulopathy in particular.
Collectively, implementation of these provisions will undoubtedly reduce
the morbidity and mortality that would otherwise be attributable to diet
drug induced valvular heart disease. (Tr. 5/3/00 at 110-12 & 115-16;
Ex. P-95 ¶ 41.) |
| [157] | g. Exit Rights |
| [158] | The Settlement Agreement provides multiple opportunities for class members
to gain information concerning the injuries they have suffered as a result
of taking Pondimin and Redux and to opt-out of the settlement in light of
the information gained through those opportunities. The Settlement Agreement
actually provides for four separate opt-out opportunities. All class members
were eligible to exercise an "initial opt-out right" by submitting
a notice of their intention to opt-out by March 30, 2000--a date that was
120 days from the date on which the class notice process commenced. (Ex.
P-3 at 57 of 148; Pretrial Order Nos. 997 & 998.) Each class member
who has timely and properly exercised an initial opt-out right may initiate,
continue with, or otherwise prosecute any legal claim against AHP without
any limitation, impediment or defense arising from the terms of the Settlement
Agreement and subject to all defenses and rights which AHP would otherwise
have in the absence of the Settlement Agreement. *fn7
(Ex. P-3 at 57 of 148.) |
| [159] | All class members who are not members of Subclasses 2(a), 2(b) or 3 and
who have been diagnosed as having FDA Positive levels of regurgitation by
the end of the Screening Period may exercise an "intermediate opt-out
right." (Ex. P-3 at 57-60 of 148.) A class member who timely and properly
exercises an intermediate opt-out right may pursue all claims against AHP
based on injury to the valve or valves which were diagnosed as having FDA
Positive regurgitation except claims for punitive, multiple or exemplary
damages, consumer fraud damages and medical monitoring. (Ex. P-3 at 57-60
of 148.) |
| [160] | Each class member who wishes to exercise a right of intermediate opt-out
must do so by submitting a written notice of his or her intent to do so
no later than Date 2. (Ex. P-3 at 57-60 of 148.) With respect to each class
member who timely and properly exercises the intermediate opt-out right
and initiates a lawsuit against the AHP Released Parties within one year
from the date on which the intermediate opt-out right is exercised, the
AHP Released Parties shall not assert any defense based on any statute of
limitations or repose, the doctrine of laches, any other defense predicated
on the failure to timely pursue the claim, any defense based on "splitting"
a cause of action, any defense based on any release signed pursuant to the
Settlement Agreement and/or any other defense based on the existence of
the Settlement Agreement. (Ex. P-3 at 57-60 of 148.) |
| [161] | All class members who are diagnosed as having mild or greater mitral regurgitation
or mild or greater aortic regurgitation by the end of the Screening Period,
who reach a matrix level condition after September 30, 1999, but before
December 31, 2015 and who have registered for settlement benefits by Date
2 are entitled to exercise a "back-end opt-out." (Ex. P-3 at 61-63
of 148.) Each class member who wishes to exercise a right of back-end opt-out
must submit a written notice of intent to do so within the latter of 120
days of the date on which the class member first knows (or should have known
in the exercise of reasonable diligence) that the Diet Drug Recipient developed
a matrix level condition or by Date 2. (Ex. P-3 at 61-63 of 148.) A class
member who timely and properly exercises a back-end opt-out may pursue all
of his or her settled claims against AHP and the AHP Released Parties except
claims for punitive, multiple or exemplary damages, consumer fraud claims
and medical monitoring claims. (Ex. P-3 at 61-63 of 148.) With respect to
each class member who timely and properly exercises the back-end opt-out
right and who initiates a lawsuit against AHP or any of the AHP Released
Parties within one year from the date on which the back-end opt-out right
is exercised, the AHP Released Parties shall not assert any defense based
on any statute of limitations or repose, the doctrine of laches, any other
defense predicated on the failure to timely pursue the claim, any defense
based on "splitting" a cause of action, any defense based on a
release signed pursuant to the Settlement Agreement and/or any other defense
based on the existence of the Settlement Agreement. (Ex. P-3 at 61-63 of
148.) |
| [162] | Finally, the Settlement Agreement provides for a "financial insecurity
opt-out right." (Ex. P-3 at 32-33 of 148.) If a condition of financial
insecurity with respect to payment of AHP's obligations under the Settlement
Agreement occurs in accordance with the conditions defined in the Agreement,
then all Diet Drug Recipients who were diagnosed as having FDA Positive
or Mild Mitral Regurgitation by the end of the Screening Period and who
have registered for settlement benefits by Date 2 have a right to opt-out
of the settlement and pursue all of their settled claims against AHP and
the other Released Parties, including claims for punitive, multiple and
exemplary damages. (Ex. P-3 at 32-33 of 148.) |
| [163] | 3. Creation of a Settlement Trust |
| [164] | The Settlement Agreement requires the creation of a Settlement Trust which
has responsibility for receiving the amounts deposited by AHP to fund the
settlement, investing such amounts (under supervision of the court), administering
the trust, providing the benefits contemplated by the Settlement Agreement
and conducting the audits contemplated by the Settlement Agreement. *fn8
It is also required to issue regular reports to the court concerning these
matters. (Ex. P-3 at 22-24, 73-81 & 100-15 of 148; Ex. P-4.) Pending
the creation of the Trust, the functions of the Settlement Trust are to
be performed by Interim Claims Administrators and an Interim Escrow Agent.
(Ex. P-3 at 70-73 of 148.) On November 23, 1999, the Court appointed Gregory
P. Miller, Esquire and the Honorable C. Judson Hamlin to serve as Interim
Claims Administrators. Mr. Miller is an experienced trial lawyer who has
served as Special Discovery Master in MDL 1203. Judge Hamlin served as a
judge in the Superior Court of the State of New Jersey handling mass tort
litigation until his retirement from that position in 1998. He has functioned
as Special Settlement Master with respect to the Diet Drug Litigation pending
in the state of New Jersey. (Tr. 5/9/00 at 18-20 & 54-56.) In Pretrial
Order No. 1010, dated December 6, 1999, the court appointed PNC Bank to
serve as Interim Escrow Agent. |
| [165] | The Settlement Agreement contemplates that there will be seven Trustees
who will serve until the year 2005, and that, thereafter, there will be
three Trustees for the Settlement Trust. (Ex. P-3 at 22 & 70 of 148.)
By Pretrial Order No. 1159, the court appointed the following individuals
to serve as Trustees for the Settlement Trust: Joseph L. Castle, II, Radnor,
Pennsylvania; George A. Beller, M.D., Charlottesville, Virginia; Honorable
Richard S. Cohen, New Brunswick, New Jersey; Senator Chris Harris, Arlington,
Texas; Ms. Alison Overseth, New York, New York; Rose-Marie Robertson, M.D.,
FACC, Nashville, Tennessee; and Honorable Dean M. Trafelet, Chicago, Illinois.
Although the court has issued an order appointing Trustees to the Settlement
Trust, the Trust had not been formally organized as of the date of the Fairness
Hearing. (Tr. 5/9/00 at 49.) |
| [166] | 4. The Settlement Fund |
| [167] | The settlement requires the creation of two separate funds to provide
benefits to class members. "Fund A" is intended to provide funding
to pay for all non-matrix benefits available under the Settlement Agreement
to class members and the associated costs of administering those benefits.
"Fund B" is intended to provide funding to pay for matrix benefits
for class members and the associated costs of administering those benefits. |
| [168] | Under the agreement, AHP is required to make payments into Fund A as follows:
(1) $50 million 5 business days after preliminary approval; (2) $383 million
5 business days after trial court approval; (3)$383 million 180 days after
the preceding payment of $383 million; and (4) $184 million 5 business days
after Final Judicial Approval. (Ex. P-3 at 22-23 of 148.) With respect to
Fund B, AHP agrees to have $2.55 billion available for Fund B payments which
the Trustees may reasonably draw upon. (Ex. P-278 ¶ 4.) In any given quarter,
to the extent that the $2.55 billion is not drawn upon, such amount accrues
interest at one and a half percent per quarter or six percent a year, which
carries forward to increase the available amount. Any remaining balance
from Fund A is also included in Fund B. In addition, AHP receives credits
against this amount for payments made to those who exercised an initial
opt out right. These credits are capped at $300 million, which AHP cannot
apply until year 5. (Ex. P-278 ¶ 33.) AHP also receives credits for payments
made to those who exercise a back-end opt out right. The amount of both
of these types of credits is the lesser of the payment AHP makes to the
claimant or the matrix level for which such claimant would be entitled to
under the Settlement. |
| [169] | Clearly, AHP has adequate financial coverage to meet these obligations.
Dr. Rosen, who testified at the May 2000 proceedings and again on August
10, 2000, examined several AHP financial reports and statements and stated
that AHP currently has approximately $2.6 billion in cash and marketable
securities. (Tr. 8/10/00 at 107.) In addition, Dr. Rosen testified that
AHP continues to generate better than half a billion dollars per quarter,
or approximately $2.3 billion per year. |
| [170] | The court is also satisfied that Funds A and B are sufficient to provide
the necessary benefits under the Settlement Agreement. To analyze the adequacy
of the funding for Fund A and Fund B, the experts who testified at the Fairness
Hearing relied on a number of considerations, including: (1) the number
of potential class members; (2) the participation rate in the Settlement;
(3) the proportion of participants who took fenfluramine and/or dexfenfluramine
61 days or more; (4) the proportion of participants who will be diagnosed
to have FDA Positive levels of regurgitation; (5) the costs of providing
echocardiograms within the Screening Program; (6) the cost of reimbursing
certain echocardiograms; (7) administrative costs; (8) costs for the registry
and research funds; (9) rates of possible progression to severe levels of
regurgitation among class members with FDA Positive levels of regurgitation
or mild mitral regurgitation; (10) progression among class members who will
receive Matrix-level benefits to higher levels of the Matrix grid; and (11)
the proportion of patients who have conditions entitling them to Matrix-level
benefits who will receive benefits from the B Matrix rather than the A Matrix.
(AHP Ex. 614 ¶¶ 9-16, 24, 26, 32-37; Ex. P-94 at 3-7.) |
| [171] | The experts used conservative assumptions likely to overstate the demands
on Fund A and Fund B. Dr. McClellan (1) assumed a higher participation rate
in the Settlement than has been seen to date; (2) assumed that a significantly
higher proportion of class members who used the diet drugs for 61 days or
longer would participate in the Settlement than would class members who
used the drugs for 60 days or less; (3) did not take into account scientific
evidence of regression of regurgitation in Diet Drug Recipients; (4) assumed
higher prevalence rates of regurgitation than have been seen in Diet Drug
Recipients; and (5) assumed progression to Matrix-level conditions despite
the lack of evidence supporting appreciable progression among users of fenfluramine
and dexfenfluramine. Dr. Kursh used similar assumptions. (AHP Ex. 614 ¶¶
10, 16 & 32; Tr. 5/9/00 at 133-35; Ex. P-94 at 3-7.) |
| [172] | Employing these conservative assumptions, Dr. McClellan concluded that
Fund A would not come close to exhaustion. Under Dr. McClellan's "base
case," only $786 million of the $1 billion committed for Fund A would
be used. (AHP Ex. 614 ¶ 25, Ex. C; Tr. 5/9/00 at 125.) The remaining funds
would be available to pay for drug refunds to class members who used fenfluramine
and/or dexfenfluramine for 61 days or longer and to reimburse class members
for echocardiograms obtained outside the Screening Period. (Ex. P-32 at
2-3 of 13.) |
| [173] | With respect to Fund B, Dr. Kursh testified that, assuming a 100% participation
rate in the settlement, the cost of paying matrix level benefits was $3.88
to 4.55 billion present value. (Tr. 8/10/00 at 97.) Dr. Kursh relied on
previous analyses done by Drs. Karalis and Goodman, whose declarations were
admitted at the Fairness hearing held in this court in May 2000. Dr. Rosen
testified that $2.55 billion was a sufficient amount to cover all of the
matrix claims likely to be filed in this Settlement. (Tr. 8/10/00 at 102.)
Dr. Rosen relied on Dr. Kursh's testimony, the provisions in the Fourth
Amendment to the Settlement Agreement, the prior declarations and analyses
of Drs. Karalis and Goodman and a comparison of participation rates in other
classes. Dr. Rosen concluded the payment structure contemplated under the
Fourth Amendment would be sufficient to bear a 76%-90% participation rate.
Dr. Rosen testified that prior to the Fourth Amendment, the amount provided
under the Agreement was sufficient to bear 66%-79% participation. (Tr. 8/10/00
at 105-06.) Dr. Rosen also testified that, considering other classes in
other cases, a participation rate of 30%-40% was considered a high participation
rate. Id. (Tr. 8/10/00 at 105-06.) |
| [174] | No evidence was offered at the Fairness Hearing suggesting that the amounts
to be paid into Fund A or Fund B are, or are likely to become, inadequate
to pay for the benefits to be provided under the Settlement. No evidence
was offered at the Fairness Hearing suggesting that the assumptions employed
by the experts would understate the demands for benefits under the Settlement.
Based on the methods and evaluations employed by these experts, the court
is satisfied the amounts provided in Funds A and B are sufficient to provide
all likely benefits under the Settlement Agreement. |
| [175] | 5. Treatment of PPH Under the Settlement Agreement |
| [176] | Under the terms of the Settlement Agreement, PPH is defined as follows: |
| [177] | For a diagnosis based on examinations and clinical findings prior to death: |
| [178] | Mean pulmonary artery pressure by cardiac catheterization of > 25 medical
monitoring Hg at rest or > 30 medical monitoring Hg with exercise with
a normal pulmonary artery wedge pressure < 15 medical monitoring Hg;
or |
| [179] | A peak systolic pulmonary artery pressure of > 60 medical monitoring
Hg at rest measured by Doppler echocardiogram utilizing standard procedures;
or Administration of Flolan to the patient based on a diagnosis of PPH with
cardiac catheterization not done due to increased risk in the face of severe
right heart dysfunction; and |
| [180] | Medical records which demonstrate that the following conditions have been
excluded by the following results: |
| [181] | 1.1.1.1.1Echocardiogram demonstrating no primary cardiac disease including,
but not limited to, shunts, valvular disease (other than tricuspid or pulmonary
valvular insufficiency as a result of PPH or trivial, clinically insignificant
left- sided valvular regurgitation), and congenital heart disease (other
than patent foramen ovale); and |
| [182] | 1.1.1.1.2Left ventricular dysfunction defined as LVEF < 40% defined
by MUGA, Echocardiogram or cardiac catheterization; and |
| [183] | 1.1.1.1.3Pulmonary function tests demonstrating the absence of obstructive
lung disease (FEV1/FVC > 50% of predicted) and the absence of greater
than mild restrictive lung disease (total lung capacity > 60% of predicted
at rest); and |