Drugs - Liability

Brief - The Fen-Phen Settlement - Brown v. American Home Products Corporation Diet Drugs, No. 99-20593 (E.D.Pa. 08/28/2000)

This is the court's approval of the settlement in the Fen-Phen class action products liability case.  The very long opinion  details the history of the drugs, the procedural background of the litigation, the evidence as presented by parties in their motions before the court, and the rationale for approving the settlement.  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.  After the Dalkon Shield litigation settlement, the assets of Robbins - including fenfluramine were acquired by American Home Products (AHP).  AHP had the exclusive right to market fenfluramine (trade name - Pondimin) in the U.S. until 1997.  Sales of Pondimin were relatively flat until 1992, when the regimen popularly known as "Fen-Phen" was developed.  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.  Dexfenfluramine 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.

The plaintiffs claim that the evidence reveals that before Pondimin and Redux were withdrawn from the market in 1997, 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.

Defendant AHP vigorously contests 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.

Epidemilogic research published in 1997 indicated a strong relationship between these diet drugs and a certain type of valvular heart disease.  Based on these studies, the FDA recommended that both drugs be recalled, which AHP did.  The findings of the study were confirmed in subsequent studies published in 1998.  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.  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.

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.

According to the court, 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, as the court put it, a firm grasp of the relevant scientific principles pertaining to liability, injury and causation in these cases. In the summer of 1999, cases against AHP had begun to go to trial.

At this point, it became clear to AHP that some people were injured and that there was a strong argument that AHP knew enough to warn about the drug before the FDA pulled it from the market.  While only a tiny fraction of the plaintiff's were actually injured, and there is scant evidence that the disease will develop later in asymptomatic persons who are no longer taking the drug, it was also clear that it would be very difficult to explain causation to juries, and that even a few huge judgments would cripple the company.  More fundamentally, AHP is a big health care company with a lot of products.  It could not afford the adverse publicity associated with fighting this in the courts.  (It might also have wanted to avoid the hubris of being sold in a bankruptcy related to a defective product - the way it originally acquired Robbins.)

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.  This order reflects those negotiations, as amended in prior proceedings.  The court summed up the medical facts of the case in this way:

"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." (The court also discussed the much lower probability of progressive pulmonary hypertension.)

The court also provided a very thoughtful analysis of the plaintiffs' legal position, noting that many states had statutes of limitations that would make litigating these claims difficult and that some states' causation standards make it difficult to get compensation in cases based on fear of a small increase in the risk of developing a disease in the future.  The settlement divides the exposed persons into various classes, based on which drugs they took, how long they took them, and their present medical condition.  It then provides four matrixes of compensatory payments and future medical services matched to the classification of the plaintiffs.  It also establishes a tracking system and registry, and a settlement trust fund which will be funded to about $2.5 billion.  The class counsel generously agreed to limit their fees to about 9% of that, or no more than $229 million.

It will be interesting to follow this settlement and the medical monitoring over the next 20 years and see the real extent of the disease caused by these drugs.  Unfortunately, there are many incentives to over diagnose which may make the results unreliable.  Given the nature of the claims and behavior of AHP in promoting the aggressive use of these drugs without adequate testing, it is a rational way to resolve this dispute.