NEW YORK -- American Home Products has agreed to pay $3.75 billion to settle thousands of lawsuits by patients claiming health problems due to the company's once popular fen-phen diet drug, the company announced Thursday.
The settlement will include money to pay patients who say they were injured by the drugs and for future medical monitoring for those who are still healthy. Pending a judge's approval, initial payments will begin later this year.American Home made fenfluramine, the "fen" in the fen-phen combination, and gave the drug a brand name of Pondimin. It also made Redux, a chemical cousin. In September 1997, the Food and Drug Administration pushed for their withdrawal after a Mayo Clinic study linked the fen-phen combination to potentially fatal heart valve damage.
The settlement is open to anyone who used Pondimin or Redux in the United States, whether or not they filed suit, American Home said.
Shares of American Home rose $3.121/2, or 7 percent, to $48.25.
About 4,100 suits have been filed against American Home over the drug, making it one of the largest product liability cases ever.
About 6 million people took the drug combination.
The settlement terms call for payments to continue for about 16 years.
Payments to be made during the next two years are anticipated to total $1.85 billion.
A toll-free telephone number (800-386-2070) has been established to provide information on the settlement.
The settlement covers all claims except for patients who say they suffer from primary pulmonary hypertension, a rare but serious lung disorder.
The settlement includes a $1 billion fund to pay for medical monitoring and $2.55 billion fund to pay for injuries and $200 million in plaintiffs attorney fees.