All total, the company has set aside more than $21 billion to cover legal costs and settlements since the diet drugs were withdrawn, according to Reuters News on May 24, 2006. As for how long Wyeth can stay afloat under the tidal wave of lawsuits, financial experts say the answer could boil down to insurance coverage.
If this is true, the future looks bleak for Wyeth shareholders because according to, "The $22 Billion Gold Rush," by Robert Lenzner & Michael Maiello, on Forbes.com on April 10, 2006:
"Insurance covered only $400 million of the damage costs, forcing Wyeth to fund the rest by selling $8 billion in assets and giving up a merger with Warner-Lambert to get a $2 billion kill fee; it warns it may have to sell more assets to fund still more claims."
"She has an incurable disease and has to be treated for the rest of her life," her attorney, Edward Freidberg, told the jury in closing arguments.
The lawsuit was filed in 2004 by attorney, Theodore Holt, of the California firm of Hackard & Holt, and was the first fen-phen-related PPH case to go to trial in Philadelphia. In a July 27, 2006, press release at the onset of the trial, Mr Holt, stated that "PPH is a serious incurable disease that can take years to develop."
"We suspect," he said, "there are still many undiagnosed victims and that PPH litigation will continue well into the future."
In the fall of 1997, American Home Products Corporation (renamed Wyeth in 2002), withdrew the diet drugs Pondimin and Redux, which in many cases were being prescribed together with phentermine, in the combination commonly referred to as "fen-phen."
"Fen" is short for fenfluramine, marketed as Pondimin, since it gained FDA approval in 1973, and its chemical cousin, dexfenfluramine, marketed as Redux, since it was approved in 1996.
"Phen" is short for phentermine, which is marketed under various trade names such as Ionamin and Fastin, as well as several generic forms.
According to the FDA, phentermine and fenfluramine were approved to be used as separate appetite suppressants for short periods of time of a few weeks in the management of obesity.
Nonetheless, doctors prescribed the drugs together and for extended periods of time in what the FDA referred to as "off label" use because there have been no studies submitted to the FDA to demonstrate the effectiveness or safety of the drugs taken together or for longer than a few weeks.
It is estimated that more than 6 million people took fen-phen and Pondimin and Redux became two of the most widely prescribed drugs in the US. In 1996 alone, their sales totaled over 20 million prescriptions.
Things began to head downhill for Wyeth in July 1997, when researchers at the Mayo Clinic reported 24 cases of a rare valvular disease in women who took fen-phen. On July 8, 1997, the FDA issued a Public Health Advisory describing the Mayo findings.
The FDA also revealed that it had received additional reports of the same kind, and requested that all health care professionals report any similar cases through MedWatch or the respective drug makers. Subsequently, the FDA received 66 additional reports.
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).