NORPLANT: American Home Products Agrees to Payout
Hoping to end five years of litigation, American Home Products Corp. has agreed to pay as much as $50 million to the 36,000 women who allege the company downplayed the side effects of its Norplant birth control device, the Dallas Morning News reports. The plaintiffs, who allege suffering from "irregular menstrual bleeding, nausea, headaches and depression," will receive $1,500 each if they filed their suit before March 1, 1999. Wyeth-Ayerst, a subsidiary of the Madison, NJ-based company, "has won three jury verdicts, 20 pretrial judgments and the dismissal of 14,000 claims by lawyers," and maintains that the device's side effects are sufficiently described in the product's labeling. Wyeth-Ayerst President Joseph Mahady said, "Our legal success has come at a steep price because lawsuits are time-consuming, expensive and have a chilling effect on research. Now that the courts have found these cases to be without merit, we can turn our attention back to providing contraceptive options for American women." However, the settlement does not settle claims from "several hundred women who developed serious injuries," including strokes and blindness, when using the device. These suits, in which the company denies any wrongdoing, will require a "significantly higher" settlement and will be handled individually.
A Vanilla Settlement
If the plaintiffs agree to the current settlement, American Home Products will pay $50 million to $75 million, including legal fees -- reversing the company's previous commitment to "never pay a penny to any of the former Norplant users." One lawyer representing hundreds of plaintiffs said, "This meets the classic definition of a good settlement. Neither party is particularly enthralled by either the amount or the result." Blair Hahn, a lawyer representing thousands of plaintiffs, added, "It's the best deal most of them could get. But we have a few cases in which the women have specific damages that are directly linked to Norplant. We are recommending that they not accept the offer." However, with a 1998 net profit of $2.5 billion on revenue of $13.5 billion, the settlement represents little more than pocket change to American Home Products. Calvert Crary, a litigation analyst based in Westport, CT, said, "In the context of a $60 billion company, this is not a significant settlement." It's probably going to be covered entirely by insurance." The company will continue to offer Norplant, which received FDA approval in 1991. It survived a second battery of tests a few years later after women reported problems with the device. Physicians "inserted the device in about 5 million women worldwide, including about 1 million in the United States" (Ornstein, 8/26).