Copley Pharmaceutical settles albuterol class action.

Copley Pharmaceutical, Inc., agreed on August 22 to pay up to $150 million to settle lawsuits against the firm for sicknesses and deaths allegedly caused by contaminated albuterol, a drug used by people who suffer from asthma and other respiratory disorders.

The tentative settlement halted a trial in progress in federal court in Chevenne, Wyoming. (In re Cop Pharmaceutical, Inc. "Albuterol" Products Liability Litigation, MDL No. 1013 (D. Wyo. Aug. 22, 1995.).)

Judge Clarence Brimmer said that claimants have 75 days to submit claims. Advertisements placed in national publications during September advised people how to file claims with the court. People who want to object to the settlement will be allowed to do so during a hearing on October 31, when Brimmer will determine whether the settlement should be finalized.

Early in 1994, Copley recalled all the albuterol it ever made at its Canton, Massachusetts, production facility, but contended that contamination was limited to about 118,000 vials and the bacteria involved was relatively harmless. Plaintiffs' complaints, however, suggested that the bacteria was a more powerful type, and discovery materials indicated that the plant's production line had been vulnerable to contamination from the day it started operations.

Many of the suits against Copley were consolidated in federal court, but about 2,000 claimants opted out of the class action suit after the damages part of the multidistrict litigation was limited to seven named defendants. (Contaminated Albuterol Leads to Class Action, TRAIL, Aug. 1995, at 12.)

"There are some good things about the settlement, and some not so good," said Paul Rheingold, a New York City attorney with 503 albuterol cases that opted out of the class action.

One serious objection is how the settlement fund is structured. It divides ages into four categories and imposes an average compensation depending on the type of injury. For example, payments made in all pneumonia cases (the most common complaint) must average no more than $20,000. Payments for other respiratory diseases that required hospitalization must average $10,000, and payments for injuries that did not involve hospitalization must average $2,000. Each of the death cases will be evaluated individually.

"Generally, the weaker cases will now rejoin the class action, while the stronger cases will proceed independently," said Rheingold.

The settlement came before plaintiffs had an opportunity to argue for punitive damages, which would have included documentation of the plant's lack of effective quality-control mechanisms as well as evidence that inspection records and information that had been submitted to the FDA had been falsified.

A spokesman for the pharmaceutical company said that most of the settlement funds would come from its insurers. Since punitive damages are not insurable, the company would have had to bear the full cost of any punitive damages judgment. (Audrey Choi, Copley Agrees to Pay Up to $150 Million to Settle Claims Related to Asthma Drug, Wall St. J., Aug. 23, 1995, at A2.)

Copley continues to face a grand jury investigation in Massachusetts over possible criminal concealment from the FDA of production problems that could have caused contamination of the respiratory-disorder medicine.