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Legal Questions Still Dogging Wyeth

From Wyeth (WYE) and diet drugs, to Merck (MRK - Get Report) and Vioxx to Eli Lilly (LLY) and Zyprexa, companies are forced to make careful calculations about mass product-liability lawsuits.

No easy answers exist. Wyeth, or example, has set aside some $21.1 billion reserves, and paid nearly $19 billion, in diet-drug litigation and settlements.

But the company continues to wrestle with another legal dilemma with the drugs Premarin, Prempro and Premphase. Plaintiffs' lawyers have filed approximately 5,400 lawsuits alleging that these hormone therapy drugs have caused breast cancer, strokes, ovarian cancer and heart disease.

The lawsuits started after a large federal study warned in mid-2002 about the risks of invasive breast cancer in women taking the hormones estrogen and progestin. Prempro and Premphase contain both, while Premarin contains estrogen.

Designed to assess if hormone therapy could prevent heart disease in healthy postmenopausal women, the National Institutes of Health-financed study concluded that this treatment "is unlikely to benefit the heart. The cardiovascular and cancer risks of estrogen plus progestin outweigh any benefits."

The study didn't address short-term risks and benefits of hormones in treating symptoms of menopause. The Food and Drug Administration tells doctors and patients to weigh the risks, adding that hormone replacement "is the most effective FDA approved medicine for relief" of menopausal symptoms. This treatment should given at "the lowest dose that helps and for the shortest time," the FDA says.

Wyeth's drugs are approved for treating menopausal symptoms, but they contain several black box warnings, the FDA's strongest alert. Because the Premarin family of drugs remains on the market, lawsuits against Wyeth are different than cases where companies removed their products, such as the pain reliever Vioxx or Wyeth's diet pills Pondimin and Redux.

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