Prescription Access Litigation and Public Citizen Secure Improved Settlement for Parents of Children Who Were Prescribed Paxil
Revised Settlement Will Provide Greater Compensation for Those Who Cannot Provide Documentation of Their Drug Purchases
Boston, MA, May 8, 2007. Prescription Access Litigation and Public Citizen last week secured an improved settlement for the parents of thousands of children who were prescribed the popular antidepressant Paxil. Under the new settlement, negotiated in cooperation with class counsel Korein Tillery LLC, defense counsel and other objectors, members of the class who cannot provide documentation for their purchases will receive far greater compensation than under the original proposed settlement.
The complaint, Hoormann, et al. v. SmithKline Beecham Corporation, sought economic damages against GlaxoSmithKline, the maker of Paxil, alleging that the company misled parents by not disclosing that the drug was dangerous and ineffective when taken by children younger than 18. Under the agreement, Glaxo is required to put $63.8 million into a settlement fund to pay class members’ out-of-pocket expenses and attorney fees.
On Feb. 23, Public Citizen filed an objection to the proposed settlement on behalf of a class member whose daughter was prescribed Paxil in 2002 and 2003, and Prescription Access Litigation (PAL), a national coalition of more than 130 organizations, including consumer, senior citizen, heath care, labor, legal services and women’s health advocacy organizations.
In their objection, PAL and Public Citizen argued that class members would not receive the full value of the settlement fund because it required that they submit proof of out-of-pocket expenses for their purchases to recover any money, even if their purchases were made more than a decade ago. Class members who were unable to prove out-of-pocket expenses would receive at most $15. The settlement originally placed an arbitrary cap of $300,000 – less than ½ of 1 percent of the total settlement fund – on such undocumented claims. Thus, under the original terms, if more than 20,000 undocumented claims were submitted, those consumers would receive a pro rata share of the $300,000 (and less than $15), regardless of how much money they spent.
PAL and Public Citizen maintained that the settlement was unfair because of the small amount of money set aside for those unable to obtain sufficient documentation, especially when compared to the size of the settlement fund, which is more than 200 times greater. PAL and Public Citizen also expressed concern that the cap on recovery for undocumented claims could allow the bulk of the settlement fund to revert to Glaxo instead of being used to benefit the class.
At a hearing last Thursday, Judge Ralph J. Mendelsohn of the Third Judicial Circuit of Madison County, Illinois, granted approval of the revised settlement, subject only to receiving a proposed final order next week. The new settlement will provide up to $100 for class members who are unable to produce documentation, and eliminates the $300,000 cap. Mail and e-mail notices will be sent to membership organizations at the end of May, June and July, encouraging the groups to contact class members. Members can also receive information about the new settlement at http://www.paxilpediatricsettlement.com. The deadline to submit a claim is Aug. 31, 2007.
“These changes significantly improve the settlement, ensuring that more consumers will get full reimbursement for their Paxil purchases,” said Alex Sugerman-Brozan, director of Prescription Access Litigation. “We encourage people who paid for Paxil for their children to visit www.paxilpediatricsettlement.com and to file claims before the end of August.”
To see the Feb. 23 objection, visit www.prescriptionaccess.org/docs/PALPaxilObjection.pdf
Prescription Access Litigation (PAL) (www.prescriptionaccess.org) is a nationwide coalition of over 130 state, local, and national senior, labor and consumer health advocacy groups in 36 states fighting to make prescription drugs affordable. PAL works to end illegal drug industry practices that increase the price of prescription drugs beyond the reach of the American consumer, using class action litigation and public education. Since 2001, PAL members have filed 28 sets of lawsuits targeting such practices. For more information, visit www.prescriptionaccess.org
Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, please visit www.citizen.org.