Texas Jury Rules Against the Maker of Fen-Phen, a Diet Drug

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http://www.nytimes.com/2004/04/28/business/28drug.html?th

 

April 28, 2004Texas Jury Rules Against the Maker of Fen-Phen, a Diet DrugBy REED

ABELSON and JONATHAN D. GLATER

 

A jury in a state court in Beaumont, Tex., ruled yesterday that the

pharmaceutical company Wyeth should pay $1 billion to the family of a woman who

died from lung disease that the plaintiff's lawyers said was caused by a diet

drug the company made in the 1990's.

 

While the verdict may well be reduced by the judge or on appeal, making it

unlikely that the company will have to pay anything near that sum, the size of

the award threatens the company's efforts to put behind it the liability from

the diet drug, fen-phen, analysts and plaintiffs' lawyers said.

 

While Wyeth has battled tens of thousands of claims from people saying they

suffered heart valve damage after taking fen-phen, this is the first verdict

against the company involving a case that asserted that the drug caused lung

damage.

 

Lawyers for Wyeth said they planned to appeal the verdict and criticized the

judge for excluding evidence they said would have bolstered their case.

 

" There is absolutely no basis in the record for the amounts awarded, " Bill Sims,

a lawyer representing Wyeth, said in a statement.

 

But analysts said the verdict was likely to frustrate Wyeth's attempts to

resolve its liability from the diet drug. Noting that Wyeth had already set

aside $16 billion " and counting " to cover the cost of litigation arising from

the drug, Hemant K. Shah, an analyst in Warren, N.J., said it was more " negative

news in the saga of diet drugs. "

 

Plaintiffs' lawyers say Wyeth faces dozens of such lawsuits and assert that the

company will now find resolving those cases much more difficult and expensive.

 

" There's no question that it will have an impact on what plaintiffs' lawyers are

willing to take, and it's going to embolden more plaintiffs' lawyers to try more

of those cases, " said Peter Kraus, a lawyer at Waters & Kraus in Dallas. Mr.

Kraus said he represents 11 fen-phen plaintiffs with heart valve damage. " It's a

huge win, " he said.

 

Other lawyers said there are many plaintiffs with lung disease that they say was

caused by the diet drug. " My office has over 100 cases similar to this one, and

we anticipate that many of these will be filed by the end of this year, " George

Fleming, a lawyer at Fleming & Associates in Houston, said in a statement from a

group of lawyers representing people who say they were harmed by fen-phen.

 

Wyeth said the vast majority of these cases have already been resolved. " The

company has settled all but a handful of those cases, " said Tim Atkeson, one of

Wyeth's lawyers.

 

Mr. Atkeson also asserted that the amount that might actually be paid in the

case would probably be much lower than yesterday's verdict. " These numbers are

going to come way down, " he said.

 

Under Texas law, lawyers said, punitive damages are limited to twice the amount

of economic damages - like the cost of medical care and lost wages - and an

additional $750,000. In this case, the jury awarded $113 million in compensatory

damages, which include economic damages, and $900 million in punitive damages,

the plaintiff's lawyers said. The trial court judge or an appellate court has

the power to reduce the punitive damage award.

 

Yesterday's verdict resolved a case brought by the family of Cynthia

Cappel-Coffey, who died as a result of primary pulmonary hypertension, a disease

that destroys the lungs and that has been linked to fen-phen.

 

But Wyeth said that Ms. Cappel-Coffey's condition might have been caused by

something other than fen-phen. In the company's statement, Mr. Sims said that

Ms. Cappel-Coffey " did not develop P.P.H. symptoms until more than four years

after she stopped using " one of the two drugs that make up fen-phen, sold under

the name Pondimin. He continued, " There are no studies that demonstrate an

association between Pondimin use and an increased risk of P.P.H. that long after

cessation of use. "

 

Mr. Sims also said in the statement that the court had not permitted the company

to present evidence that might have suggested that the damage to her lungs had

been caused by another diet drug. The court excluded evidence that Ms.

Cappel-Coffey used four other diet drugs after she took Wyeth's Pondimin, he

said.

 

" The court's decision to preclude all mention of the risks of other diet drugs

in this case will be a significant issue on appeal, " Mr. Sims said.

 

Wyeth has tried to close the door on its fen-phen liability, in part by

financing a $3.75 billion trust to pay those who suffered heart valve damage

from the drug. The company has set aside nearly $17 billion to cover its

liability.

 

While the company asserts that it has no plans to add to money it has set aside

to cover these claims, analysts said Wyeth might not have a choice. Exactly how

much may need to be added is unclear - analysts at Sanford C. Bernstein &

Company said the amount could be $2 billion to $20 billion.

 

Wyeth reported net income of just more than $2 billion on annual revenue of

$15.9 billion in 2003. The company's stock closed yesterday at $39.27 a share,

down 23 cents. The verdict was announced after the market closed.

 

Copyright 2004 The New York Times Company

 

 

 

 

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