Lawyers Fight Over Diet Drug Settlement
Associated Press
Sep 27, 2003

PHILADELPHIA (AP) Auditors reviewing the medical records of people slated to receive a share of a $3.75 billion trust fund for people who took the fen-phen diet drug have found "a huge number" that may not have suffered heart-valve damage as claimed, and shouldn't be paid, according to an attorney for the trust.

More than 100,000 people have filed the paperwork and presumably telltale echocardiograms that would entitle them to a portion of the settlement fund, set up by Wyeth Inc. to resolve claims related to the recalled fen-phen drugs Pondimin and Redux.

But payments to hundreds have been tossed out since last fall, when a federal judge, bothered by sample audits that found a high percentage of unjustified claims, ordered a total review.

"A huge number were problematic," said Richard L. Scheff, an attorney for the Philadelphia-based trust handling the distribution of the settlement. "There is an enormous task to be done to separate the wheat from the chaff."

That weeding effort hasn't been pretty.

U.S. District Judge Harvey J. Bartle III, who is overseeing the settlement, barred two New York law firms from collecting shares of the settlement after ruling that they had submitted unjustified claims.

The trust sued a Kansas City doctor who had been assisting with the filing of claims, saying she diagnosed thousands of people as being ill without properly evaluating their health.

Trust officials also set up a toll-free hotline for people to report fraud, threatened to turn over evidence of wrongdoing to prosecutors and asked lawyers to have doctors reevaluate thousands of cases to confirm their diagnoses.

The trust has also continued to make payments -- more than $1 billion has been distributed so far. But some lawyers with clients who applied for a share of the settlement have been surprised by the ferocity of the crackdown.

Booneville, Miss., attorney Joseph Langston, who represents about 2,000 clients in the settlement, said he plans to have all of his claims re-examined to avoid running into problems with the auditors.
"We're instructing our cardiologists to read these echocardiograms again, and only certify cases where there is no question that the person suffered some damage," Langston said. "We are going to do this more strictly, more narrowly."

Other attorneys have fought back. A group of lawyers upset at the new audit rules unsuccessfully asked a judge this summer to fire the trust's lead legal team, saying it had become too cozy with Wyeth.
"I've probably got 800 or 900 clients whose claims have been on file for over a year, and there has been no progress. Not one has gotten a dime yet," said Houston attorney George M. Fleming, who was part of the group that challenged the trust's management.

He said many of his clients chose to settle because the trust allowed them to bypass the emotional burden and potential risk of a trial, only to find that the settlement process is equally intense and risky.

"This is not turning out to be a nonconfrontational system," he said.
Under the original terms of the settlement, the trust largely left the work of determining who had been hurt by the drugs to cardiologists hired by the law firms, and only 15 percent of the claims submitted were audited. The rest were to be paid without question or review.

"The assumption was that everyone would be honest," Scheff said.
Now, every claim must go through the audit process. Scheff declined to say what percentage of claims was being rejected, but he described the number as "zillions."

Some lawyers involved with the case said the crackdown on claims is being driven by concern that the $3.75 billion fund is too small to pay every injured person.

Wyeth spokesman Lowell Weiner declined to comment on the audit.
About 6 million people took Pondimin and Redux before they were pulled from the market in 1997. Wyeth has already paid more than $13 billion in claims related to the drugs.