Some Days You Can’t Win: Lawyers in Fen-Phen Case Found to Have Defrauded Injured Patients

In “Pharma Goes to the Laundry,” Carl Elliott described Wyeth‘s marketing campaign for fenfluramine, the fen in the diet drug combination fen-phen. It included a stealth marketing effort, including strategically placed ghost-written articles on behalf of obesity as a public health problem. When reports of heart valve damage afflicting patients on fen-phen began to come out, the company allegedly tried to conceal the evidence it had supporting a causative role for the drug combination. [Elliot C. Pharma goes to the laundry. Hasting Center Report 2004: 34: 18-23, link here.] (See our post here.)

A few days ago, the New York Times reported how patients who developed valvular heart disease after taking fen-phen allegedly were then ripped off by their own lawyers.

W. L. Carter knew there was something fishy going on when he went to his lawyers’ office a few years ago to pick up his settlement check for the heart damage he had sustained from taking the diet drug combination fen-phen.

The check was, for starters, much smaller than he had expected. And his own lawyers threatened to retaliate against him if he ever told anyone, including his family, how much he had been paid. ‘You will be fined $100,000, you will go to jail and you will be sued,’ Mr. Carter recalled them saying.

Mr. Carter was right to have been suspicious. The lawyers defrauded their clients, a state judge has ruled in a civil case, when they settled fen-phen lawsuits on behalf of 440 of them for $200 million but kept the bulk of the money for themselves. Legal experts said the fraud might be one of the biggest and most brazen in legal history.

When the clients sued the drug maker, they agreed to pay the lawyers 30 percent to 33 percent of any money that was recovered, plus expenses. In this case, that would have left the 440 clients to divide perhaps $135 million.

But the clients received only $74 million. An additional $20 million went to a questionable ‘charitable fund.’ The rest — $106 million — went to lawyers. Though amounts of the individual settlements remain sealed, court papers suggest they were from $100,000 to $5 million. On average, plaintiffs received less than 40 percent of what the settlement agreement specified, instead of the roughly 70 percent to which they were entitled

At a hearing in 2002 … the original judge in the case said … [the lawyers] deserved the higher compensation ‘for their services and for the incredible risks they took’ and for ‘the administrative headaches that came with that.’

But the judge who made that statement and who approved the settlement, Joseph F. Bamberger, received a financial benefit from the windfall. After retiring from the bench in 2004, Judge Bamberger became a director of the $20 million charity for a $5,000 monthly fee. He has since repaid what he received.

Judge Bamberger was reprimanded last year by the Judicial Conduct Commission in Kentucky. The commission said his actions were disturbing, inexcusable and shocking to the conscience.

Judge Bamberger acknowledged to the commission that he had approved fees and expenses of what he understood to be about 49 percent of the settlement but said he had not known about the contracts calling for payment of only 30 to 33 percent. He declined to comment for this article.

In August, the Kentucky Supreme Court suspended the three lawyers, finding that there was probable cause that they had misappropriated their clients’ money.

Some days, you just can’t win. There seem to be two morals to this story. First, stealth marketing of and concealment of data about pharmaceuticals can have a cascade of bad effects on patients. Second, trying to solve such problems retrospectively through civil litigation can have its own bad effects. Instead, we need to better assure the honesty of clinical research data about and the marketing of pharmaceuticals (and devices) from the beginning.

Physicians need to be better watch-dogs in this regard on behalf of their patients.