Some Claimants' Lawyers May Have Submitted Bogus Heart-damage Claims
The U.S. Attorney's Office in Philadelphia and the FBI are investigating allegations of fraud in the $5 billion fen-phen class action settlement. The federal investigators are examining tens of thousands of claims asserting heart damage from the fen-phen diet-drug combination to determine whether lawyers, doctors, and medical technicians conspired to submit bogus claims, according to a September 18, 2005 article by Emilie Lounsberry in the Philadelphia Inquirer.
Before being recalled in 1997, an estimated 6 million people took Pondimin or Redux in the prescription diet-drug combination known as fen-phen. American Home Products, now known as Wyeth, was the drug company responsible for fen-phen.
Shortly after a Texas woman was awarded $23 million by a jury, American Home Products / Wyeth settled many of the other pending fen-phen cases and, ultimately, created a multibillion-dollar settlement fund called the American Home Products ("AHP") / Wyeth fen-phen Trust for future cases. In order to get compensation from the AHP / Wyeth fen-phen Trust, claimants only had to show that they had taken the Wyeth fen-phen pills and that they had developed heart-valve problems. To be clear, these fen-phen claimants did not have to provide the class action settlement Trust with actual "causation" proof showing that, in their particular case, it was the fen-phen use that damaged their heart.
In this context, AHP / Wyeth expected about 36,000 claims to be submitted to the fen-phen Trust for consideration and payment. Remarkably, however, more than 87,000 fen-phen claims were submitted to the AHP / Wyeth Trust. As the number of fen-phen claims grew, so did the level of suspicion about bogus heart-damage claims being submitted by some claimants and their lawyers.
Suspicious of the larger than expected number of claims, in 2003 the AHP / Wyeth fen-phen Trust hired Dr. Joseph Kisslo, a Duke University cardiologist, to audit 968 fen-phen class action settlement claims that had been submitted to the Trust for payment. Remarkably, and to the interest of federal prosecutors, Dr. Kisslo found that 70 percent of the required echocardiograms in support of those 968 claims contained "material misrepresentations" which, according to Kisslo's opinion as a medical doctor, amounted to "pervasive fraud." Essentially, according to Dr. Kisslo, these fen-phen claimant's echocardiograms had been manipulated by various means to give a false image of heart-valve damage.
We turn to Emilie Lounsberry's September 2005 article in the Philadelphia Inquirer for reactions to the federal criminal investigation from some of the primary players in the fen-phen litigation:
- "Doug Petkus, a Wyeth spokesman, said the company was 'in favor of this type of inquiry' and would cooperate in an investigation."
- "'I think there has been a significant amount of fraud in this claims process,'" said [Philadelphia] lawyer Michael Fishbein, who is counsel for [the fen-phen] class-action plaintiffs.... He estimates that up to 85 percent of claims may be questionable."
- "... U.S. District Judge Harvey Bartle 3d, who is presiding over the federal fen-phen litigation and the settlement, has repeatedly expressed alarm about fraud. [¶]In May, he threw out the case of a Texas woman, Cheryl Yvonne Barnett, who contended she took Redux for about four months in 1989, then developed valve disease. [¶]Bartle cited serious problems with her claim: Redux wasn't available until 1996; the pharmacy that she said filled her prescription was a parking lot, and the doctor who she said prescribed the drug did not exist. [¶].... 'There can be no doubt,' Bartle said, 'that an attempt was made to perpetrate a fraud upon Wyeth and the court.'"
- "Former Chief U.S. District Judge Louis C. Bechtle, who presided over the fen-phen case until he retired in 2001, said in an interview last week that mass tort cases generally have been tainted by 'hyped-up claims.' [¶]Settlement funds are at risk for depletion before worthy claimants are compensated, he said, and the courts do not have the resources to 'police' the legitimacy of claims. [¶]Bechtle called it a 'national calamity' and said the legal system must come up with a way to restore litigants' faith. [¶]'The courts,' he said, 'are the only place people can turn.'"
If the U.S. Attorney's Office does establish that there was a conspiracy to generate and submit bogus fen-phen claims, then we expect criminal charges to follow -- and rightly so.
(Posted by: Tom Lamb)