Fen-Phen Lawyers Awarded $412 Million In Fees
10 CommentsBy Ed Silverman // April 10th, 2008 // 8:00 am
The spoils will be divided between more than 70 law firms for their work, and the award should mark the beginning of the end for a class-action settlement that began a decade ago, The Legal Intelligencer reports.
In a 125-page opinion, according to the paper, Chief US District Judge Harvey Bartle III described the case as “nothing short of a herculean effort spanning almost a decade.” He found that the plaintiffs lawyers had logged more than 578,000 hours and that “just to put this time into perspective, it is the equivalent of approximately 24,000 days, or almost 66 years, of around-the-clock work on this litigation.”
In 2002, Bartle had awarded “interim fees” of more than $156 million, and this week’s award compensates the plaintiffs lawyers for work up to the end of March 2007, bringing the total fee award to $568 million, the paper writes. About $20 million of the latest fee award was set aside to provide a fund for future fee petitions, but Bartle said that while the case is sure to continue for years, his ruling was “for all intents and purposes a final award of costs and fees.”
The original settlement, struck in November 1999, was valued at $3.75 billion, but that sum proved to be only a rough estimate of the ultimate cost to Wyeth, which sold Pondimin, one-half of the fen-phen drug cocktail, and its chemical cousin, Redux. Both were withdrawn in 1997 after links to heart and lung problems. Plaintiffs lawyers now estimate that the ultimate value of the settlement is $7.5 billion, according to the Intelligencer.
Jack2
$412 million dollars/580,000 hours = $712/hour.
AV Block
That’s what I was thinking! Basically, one hour a week for 52 weeks = 52 hours
52 hours x $712.80 = $37,000 per year.
$37,000 compares favorably to the median annual salary of American worker.
Like I said before, lawyers are a large, yet underappreciated, problem with the health care system.
Justice in Michigan
This may or may not surprise, but I agree. Legal fees and percentages are way out of whack and reason.
As I wrote at the end of a post on last preemption thread, I still think the “nuclear option” of preemption is the wrong answer - for industry as much as for the rest of us. But, without it, there would remain plenty of room to fight scuzziness wherever it is, and there is no shortage.
Justice in Michigan
BTW - and _not_ for sake of “fair balance” - but the lawyers who work for industry ask for the same, and often much higher, bucks per hour.
Their work has as much or more to do with fighting other companies (over patents, etc.) as product liability.
Jack2
I’m in the wrong field.
JIM, do you have any idea how much pharma companies spend in legal fees for product liability suits (as a total and as a % of revenue). I know you strongly oppose preemption, and you’ve made some compelling points - I just want to assess the financial magnitude of this issue.
Justice in Michigan
Jack2 - I honestly don’t know, and I would also be interested in the total. I’ll see what I can dig up.
As you probably know, there are figures thrown around for the cost of torts (all torts) in general, and some pretty lurid websites about those Greedy Trial Lawyers, etc. As you would also expect, all the numbers are challenged by folks who feel differently - Public Citizen, AARP, etc.. What else is new?
If I can find anything pharma-specific, I’ll include it.
Jack2
Thanks JIM, and I understand everyone seems to have an agenda - making it tough to get a good number.
I know pharma really likes preemption, and I wonder how much of a difference it will make compared to things like reimportation from Canada, or direct negotions between the US gov and drug companies on pricing.
*A doubtful possibilty, even more so with medical care
Justice in Michigan
Jack2 - This is not an answer to your question (I haven’t found one yet), but Business Week did a series of articles on the tort reform debate in general a few years ago. As such things go, it seemed to me less politicized than is typical of writing on the topic. It can be found at
http://www.businessweek.com/magazine/content/05_11/b3924610.htm
As a flavor of the discussion, they note in the opening bit:
“When lawmakers debate changes to other major institutions, such as Social Security or the tax code, they rely on blue-ribbon panels and bipartisan task forces. The tort-reform polemic, in contrast, has been based on factoids and statistics drummed up by vested interests. Calling for a government study might sound like typical Washington stall tactics, but with each side accusing the other of lying, a study could turn down the heat — and allow a real debate.”
Of course, there are always uncertainties. Like regulation, lawsuits are generally viewed purely in terms of their costs. But some would argue - most clearly about regulation - that much has been saved by having clear and achievable standards. It is at least conceivable that the potential of liability has _kept_ companies from acting in ways that might have ended up costing much more - in treasure as well as in reputation, credibility, etc.. And, of course, the other side will talk about the drain on innovation, etc.
These are questions that can be answered empirically only in part. The proverbial “dog that didn’t bark” - either as cost or as product - is, by definition, always just out of view.
Doc
Bless the lawyers, without them there would have been more patient harm.
Jack2
Thanks for the link JIM. It seems like a thorny issue with both sides lacking real numbers, and automatically assuming they know the answer based on their own preconceived notions. Reminds me of this board.