Wyeth says it supports a proposal to amend the terms of the national diet drug settlement it established in 1999, following the withdrawal of its anti-obesity drugs, Pondimin (fenfluramine) and Redux (dexfenfluramine), two years previously. If approved, the move will see the settlement include the less-serious claims from people who said they were injured as a result of taking the products, and could significantly speed up the resolution of thousands of the claims pending against the firm and move it a step nearer to drawing a line under the diet drug litigation.
Wyeth explained that the amendment would create a new claims processing structure, funding arrangement and payment schedule for the least serious but most numerous claims in the settlement. Under the terms of the proposal, Wyeth would put a $1.25 billion dollar deposit into a supplemental fund, which would ultimately be split between claimants that pass a medical review clarifying that they did suffer damage as a result of taking the drugs. If claimants undergo heart valve surgery or other certain more serious medical conditions by December 31, 2011, they would remain eligible to submit claims to the existing settlement trust.
“Although the proposed amendment must undergo further judicial review… [it] ensures that the large majority of class members who have less serious claims will receive compensation on a streamlined basis. And it preserves funds in the existing trust for the more serious claims. It also would help resolve much of the uncertainty that has surrounded the diet drug settlement – for both class members and for Wyeth,” explained Lawrence Stein, Wyeth’s senior vice president and general counsel.
The firm has already set aside almost $17 billion into its legal reserves to settle claims that the obesity drugs were linked to heart valve defects and a condition known as primary pulmonary hypertension. If the amendment wins final clearance later this month, Wyeth would move a step nearer to drawing a line under the diet drug litigation.
