said Wednesday that a federal judge has approved a settlement that will cover 40,000 to 42,000 people who claimed injury from diet pills that the company withdrew from the market in 1997.
The judge's action doesn't end all of the
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fen-phen-diet-cocktail lawsuits, but it does conclude a big chapter in the litigation. The announcement involves a much-negotiated and often-revised deal, first reached in May 2004. It covers the least serious, but largest number, of injury claims related to an October 1999 class-action settlement.
The latest arrangement, known as the seventh amendment to the Nationwide Diet Drug Settlement, is "an important milestone in our broader effort to resolve the diet drug issue," said Lawrence V. Stein, the general counsel for Wyeth, in a prepared statement.
Wyeth says 5.8 million people took fen-phen, a combination of its Pondimin and a non-Wyeth drug called phentermine. Wyeth pulled Pondimin and another drug, Redux, from the market in 1997. Lawsuits allege that the Wyeth drugs separately, or in combination with phentermine, caused serious injuries and even death.
The seventh amendment creates a $1.28 billion fund to pay the claims. Wyeth has contributed $425 million so far, and the rest will be deposited as needed. The agreement doesn't change the amount of reserves -- $21.1 billion -- that Wyeth has set aside for litigation expenses, settlement costs and trial awards.
The number of remaining suits and the ultimate cost of the litigation is hard to gauge because plaintiffs are still filing cases, and Wyeth is still trying to settle others. For example, Wyeth's latest quarterly report filed with the
Securities and Exchange Commission
says the company has made 20,000 other settlements in negotiations with plaintiffs' lawyers. "The company cannot predict the total number of cases that ultimately will be settled," the SEC filing says.
In addition, the document says, Wyeth settled what appears to have been its biggest fen-phen setback. A Texas state-court jury in April 2004 awarded the family of a deceased woman $113.4 million in compensatory damages and $900 million in punitive damages, saying that Pondimin caused her death.
Wyeth appealed, and oral arguments were scheduled for April 13. But the two sides reached an agreement in principle to settle the case. The case has been postponed pending completion of the settlement.
By early afternoon Wednesday, Wyeth's stock was off 25 cents to $47.15.