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People hailed it as a miracle drug. In the 1970s, a blood-clotting product designed to help extend and normalize the lives of hemophiliacs by allowing them to treat bleeds at home became widely available. The product, though, turned out to be deadly for many users. Tainted with HIV and hepatitis C viruses, it killed thousands. A suit brought by American hemophiliacs against four major drug companies over the contaminated blood settled in 1997 (with the companies admitting no wrongdoing). It alleged that the pharmaceutical manufacturers failed to take timely action to improve the safety of their blood products once the possibility of contamination was well-known. Now, hemophiliacs from more than 17 foreign countries and the United States have joined to sue the companies. Though many of their claims are similar to those made in the earlier case, the foreign plaintiffs have additional, more serious allegations. Most notably, they contend that once the companies could no longer market tainted blood products in the United States, they continued to ship them overseas. The charge, if true, would be tantamount to murder. Coming from Europe, Asia, Africa, the Middle East, and North and South America, the 3,000 plaintiffs have had vastly different experiences. But they share the common frustration of having to cope with the degenerative effects of hemophilia while battling HIV and/or hepatitis C (HCV), which has no cure and can result in chronic liver disease. Haydn Lewis is one of them. With his irrepressible smile and buoyant demeanor, Lewis, 47, doesn’t immediately seem sick. As he talks about growing up with hemophilia, he doesn’t volunteer that his stomach aches constantly, a common side effect of hepatitis C. Nor does he dwell on the HIV virus that causes him to tire easily. As a youth in his home country of Wales, Lewis refused to be constrained by his disease. At age 18, he married his childhood girlfriend, Gaynor, and pursued the unlikely — for a hemophiliac — career of carpentry. In 1979, at age 22, he began using the miracle product, known as Factor VIII concentrate, expecting it to make his disease even more manageable than it already was. Six years later, with two young sons, he was diagnosed as HIV-positive. Three years after that, in 1988, despite their painstaking efforts to ensure safe sex, Gaynor learned that she had contracted HIV from him. Then, in 1993, Lewis learned of his HCV status. While Lewis’ hemophilia allowed for a relatively normal lifestyle, the additional illnesses have made that impossible. With his lyrical brogue lending a genial tone to his words, Lewis lists some of the concessions he and Gaynor have made in the hope of adding another week, month, or year to their lives: giving up careers and thus substantial income; not drinking; curtailing play with their two sons. Gaynor, more reserved and soft-spoken than her husband, adds that because they’re mostly at home now, living on government disability, they have become isolated socially. In the face of these hardships, Lewis exudes a cheerfulness that’s at odds with his story. “I know it’s self-preservation,” he says, “but I want to try to get on with life. I don’t want to have this negativity because it’s all wasteful stuff. It doesn’t get you anywhere.” What he hopes will get somewhere is the lawsuit he and Gaynor have joined against the Baxter Healthcare Corp., the Bayer Corp. (formerly Cutter Biological), the Armour Pharmaceutical Co., and the Alpha Therapeutic Corp. They allege that the companies committed negligence, fraud, and conspiracy in making and distributing the blood products used by hemophiliacs. The suit contends that even after the companies knew it was possible that blood supplies were contaminated with the HIV virus, they failed to take several available actions to ensure the purity of their products. They say that the companies failed to warn doctors, hospitals, and patients of the risks, and fraudulently misrepresented the safety of the products while concealing their dangers. And they assert that the defendants conspired with one another to keep screening standards low, oppose recalls, and delay introduction of safer products. “We contend that these new actions do not have legal and factual merit,” says Alpha Therapeutic lawyer Kevin Stack, of Glendale, Calif.’s Knapp, Petersen & Clarke. Neither Stack nor lawyers for the other companies would comment further on the record about the specific allegations. The case is still in the early stages, with a motion for class certification pending before federal District Judge John Grady in Chicago, the same judge who oversaw the earlier litigation brought by U.S. hemophiliacs. The case landed in Grady’s court after the companies moved to consolidate suits filed by nearly a dozen firms on behalf of foreign plaintiffs. The multidistrict panel deemed them part of the earlier litigation, adding the cases to the original docket but differentiating them as “second generation” suits. Leading the suit for the plaintiffs is San Francisco’s Lieff, Cabraser, Heimann & Bernstein, which has about 2,000 cases. The Sheldon J. Schlesinger firm in Miami, which represents about 1,000 clients, is co-counsel. For the defendants, Sidley Austin Brown & Wood is representing Armour; Bartlit Beck Herman Palenchar & Scott is representing Bayer; and Dechert is representing Baxter. TROUBLING QUESTIONS At the heart of the case this time around is a trove of internal company documents relating to the manufacturing and shipment of blood products to overseas markets. These documents, discovered during the earlier litigation and afterward, raise a number of troubling questions: Did the pharmaceutical companies do all they could to ensure the safety of their blood products? Did they knowingly dump HIV- and HCV-tainted blood products internationally after they could no longer be sold in the United States? Or were the companies bound by the limits of medicine and technology and thus unable to stop the spread of an epidemic through their products? The first blood-clotting product for hemophiliacs was produced by Baxter and licensed in 1966. By the 1970s, all four companies were manufacturing similar products and distributing them for use by hemophiliacs around the world. These products, known as Factor VIII and Factor IX concentrates, were made by distilling and concentrating the plasma of large groups of donors, sometimes as many as 25,000. Harvested from the plasma are the key proteins (Factor VIII or Factor IX) missing from a hemophiliac’s blood. The plaintiffs allege that the drug companies deliberately recruited plasma donors from high-risk populations like prisoners, gay men, and intravenous drug users. Doing so, they suggest, allowed the companies to maximize profits because they could harvest the blood of this group for Factor VIII and IX as well as for other medical products like a vaccination for hepatitis B. The plaintiffs assert that the companies should have used screening processes for their high-risk blood donors, particularly by 1981, when the Centers for Disease Control and Prevention determined that an AIDS epidemic existed among gay men. They accuse all the companies of ignoring that connection. A February 1986 Armour report, for instance, summarizes a meeting that reveals that even then, Armour was still not screening blood donors for the HIV virus — despite the fact that a test had been approved by the Food and Drug Administration a year before. “The net result of these discussions was that, in the opinion of everyone at the meeting, there is no problem with Factorate drawn from unscreened donors,” the report notes. “However, it was felt that, just as with any ongoing improvements which have been made with Factorate, adding the screening to the donor pool is an improvement to the product, and we should, first of all, withhold from distribution all nonscreened product.” That attitude was particularly egregious, according to plaintiffs, in light of a May 1985 Cutter memo written by Stephen Ojala, Cutter’s director of regulatory affairs, to the company’s biological management committee. Ojala’s memo noted that the FDA had requested assurance that the companies were using the screening test. Armour attorney Sara Gourley of Sidley Austin declined to comment on the memo or the litigation. The first hint of a potentially serious problem with the factor concentrates came in July 1982, when the CDC reported three cases of AIDS in U.S. hemophiliacs. Already, the plaintiffs allege, the companies had available and should have been using either a heat-treatment process or a detergent that would have killed any viruses (including HIV and HCV) in the blood products. Indeed, in 1983, after CDC warnings of evidence suggesting that AIDS was passed to other people through blood, Baxter put out a heat-treated product that killed the HIV virus. By the end of 1984, the other three companies, which had been researching and testing heat treatment for several years to address the concerns about hepatitis in the blood, had similar products for sale in the U.S. market. What happened overseas is not as clear. The plaintiffs allege that the companies should have stopped exporting the non-heat-treated products as soon as the heat-treated ones became available in the United States. Instead, they assert, they continued to produce and export the non-heat-treated product to many countries for more than two years after its U.S. introduction. Among a slew of documents, many first reported in a New York Times article last year, is the May 1985 memo from Cutter’s Ojala. The memo notes that the FDA insisted that Cutter and the other companies immediately stop manufacturing and distributing non-heat-treated products. “[The FDA director of blood and blood products] questioned the utility for a nontreated process given the current situation and requested that we uniformly send letters to the FDA stating we would no longer produce or distribute non-heated product to preclude negative reaction from the medical community and the general public,” the memo says. The FDA’s director of blood and blood products was quoted as saying he could revoke the companies’ licenses through the nonregulatory process. However, “he did not want any attention paid to the fact that the FDA had allowed this situation to continue for so long, and he would like the issue quietly solved without alerting the Congress, the medical community, and the public. Implicit in the discussion was the concern that the FDA felt that this action was long overdue.” BOTTOM-LINE ISSUES Apparently, from the company standpoint, a switch to heat-treated products raised bottom-line issues. A November 1984 telex from Cutter’s marketing manager for the Far East to the company’s Hong Kong distributor directs that the non-heat-treated blood product be used before switching to the “safer” heat-treated products. The reason? Production costs of heat-treated products were expected to be higher. In a May 1985 telex, this same marketing manager responded to public fear in Hong Kong about non-heat-treated blood products. At a time when the company clearly knew the opposite to be true, the manager assured the distributor that the non-heat-treated product presented “no severe hazard” and that “it is the same fine product we supplied for years.” “That line is why we have these cases,” says Michael Baum, of Baum Hedlund in Los Angeles, who is representing about 65 Asian plaintiffs. “Right then, the companies had already undeniably established that HIV was the source of AIDS, that they had already determined that a large population of hemophiliac infusers were HIV-positive, that unheated factor concentrates had detectable HIV viruses. Yet they were instead telling people it was not hazardous.” Bartlit Beck partner Lindley Brenza, an attorney for Bayer, declined to comment. Problems arose, though, even when the products were heat-treated. Relying on more than three dozen documents, including many Armour internal documents, the plaintiffs suggest the company knowingly distributed a heat-treated blood product that had not effectively killed the HIV virus. Under duress in October 1986, Armour surrendered its U.K. license to sell heat-treated factor; it would have been revoked because Armour’s heat-treatment process, shorter and at lower temperatures than that of other companies like Cutter, had been found to transmit HIV. The plaintiffs assert that after being put on notice that people were being infected, Armour failed to recall its defective heat-treated product from other overseas markets. The plaintiffs also assert that Armour attempted to keep negative results about the heat-treatment process from becoming public. In a 1985 study commissioned by Armour, Dr. Alfred Prince of the New York Blood Center found that the company’s heat treatment did not result in destruction of the HIV virus. According to Armour documents, Prince told the company that he wanted to publish his findings, but Armour squelched that proposal by invoking a confidentiality clause in their contract. An Armour memo from October 1985 notes that the company believed Prince’s report would have been incomplete because it didn’t take into consideration more-favorable data from another study. Consequently, the company felt that the publication of his results could result in “potential substantial negative commercial impact” for Armour. Another October memo, recording the minutes of Armour’s DNA steering committee four days later, notes the discussion among Armour executives on the issue of the heat-treated product’s problems. One executive advised that the company use higher temperatures and longer periods of time for heat treatment. Subsequent executives responded with concerns about the financial impact. “If we modify our heat-treatment process at Kankakee, we’re going to incur potentially major expenses. Our competitors had to ‘retool’ their facilities in order to go to the higher temperatures,” the memo notes. None of the defense lawyers would answer questions about the litigation on the record. In court papers and appearances, however, they argue that this suit just dredges up arguments made previously by the U.S. hemophiliacs — except now with weaker plaintiffs and weaker claims. In the earlier case, the plaintiffs settled for $600 million, a sum viewed largely as a defense win. It was made in the wake of a denial of class certification and a rancorous breakdown in cooperation among the plaintiffs’ lawyers. Each of the 6,000 plaintiffs ended up with about $100,000, regardless of their injuries. Many, including plaintiffs’ lawyers, considered it paltry compensation given the hemophiliacs’ illnesses and deaths. The defense has fared well in individual cases, too. Before the mass suit, hundreds of hemophiliac cases were dismissed on summary judgment. Those cases that have gone to trial have generally fared poorly. Of about 25 trials, 20 have been defense wins, and three plaintiffs’ verdicts were reversed, says one defense lawyer. Plaintiffs’ lawyers can’t confirm the exact numbers, but they agree that plaintiffs have won few victories. As in the previous litigation, the companies assert that they acted with due care, in compliance with federal statutes and regulations, and in accordance with the existing state of medical and scientific knowledge. They say these cases are time-barred and that long-standing blood-shield statutes — state laws passed to insulate blood and blood-product services from strict liability and that require plaintiffs to prove negligence — protect the companies. In court papers, they deny liability, noting that many plaintiffs have no clear records of which blood products they infused and that many used a mix of products, including domestic blood supplies that could also have been contaminated. They also deny that effective detergents were readily available by the late 1970s. One defense lawyer, who does not want to be identified, says that the companies, while sympathetic to the illnesses of the plaintiffs, acted to improve their products as soon as they were medically and technologically able to do so. This attorney argues that the plaintiffs’ lawyers have vastly oversimplified the facts about when the companies knew that the HIV virus was transmitted through blood and about the companies’ knowledge of how the blood products could have been treated to eliminate disease. The lawyer points out that in 1982, only a handful out of thousands of hemophiliacs had been diagnosed with AIDS — a number that was hardly high enough to demonstrate a connection between blood products and HIV. The lawyer also asserts that most hemophiliacs were infected prior to 1982, before the companies could have known about the danger of HIV transmission through blood. In any case, the lawyer notes the companies have already settled with many foreign hemophiliacs and suggests the plaintiffs overwhelmingly suffer from HCV alone, a fact that lessens the sensationalism of the charges (because HCV is less fatal and less of a stigma) and could make proving the allegations harder. On the subject of heat treatment and detergent cleansing of blood, this defense lawyer contends that the initial detergent processes carried severe side effects, like aneurysm, which made their use dangerous or ineffective. Heat treating, too, the defense lawyer says, was tricky, because too much could destroy the protein. As for hepatitis C, the seriousness of its effects weren’t understood at the time. But the companies did advertise that contraction of hepatitis was a known danger. Just as with chemotherapy, the lawyer suggests, the possibility of getting hepatitis was considered a small risk for the palliative properties of the hemophilia treatment. “We really did make life-saving medicines,” the lawyer asserts. “People were mostly infected earlier, before anything could be done.” It’s a version of events the courts have upheld in the past. “They can try to sell it in the media, but they can’t sell it to the jury,” the lawyer adds. JUMPING HURDLES Despite the daunting past record of court verdicts for the pharmaceutical companies, Lieff, Cabraser partner Robert Lieff expresses optimism about the suit’s prospects. While many of the lawyers on both sides have been litigating blood cases for more than 20 years, Lieff, Cabraser is a relative newcomer. The firm was brought in by Charles Kozak, a solo practitioner originally based in Hawaii who now works out of Lieff, Cabraser’s San Francisco office. Kozak worked on the earlier class litigation and needed a firm with greater resources to help on individual opt-out cases. Lieff, Cabraser and Kozak handled about 12 of those cases and laid the groundwork for the international plaintiffs’ case. Since then, they’ve made several trips abroad, including to Brazil and Thailand, to meet with hemophiliacs and broaden their class of clients. Lieff and other plaintiffs’ lawyers assert that important differences make their case stronger than that of the American hemophiliacs. First, they’re better prepared to fight in this round, armed with a trove of documents the American plaintiffs didn’t have. (They found some of the documents in a warehouse in 1999 after a judge in one of the individual opt-out cases issued a contempt order against Cutter for failing to provide access to them in discovery. Plaintiffs’ lawyers have submitted them in a few of the opt-out trials involving American hemophiliacs to demonstrate that the companies had a lax attitude toward safety. Now, the plaintiffs’ lawyers plan to develop and use these documents as the backbone of their foreign clients’ claims.) The new plaintiffs team also plans to focus less on when the companies introduced a heat-treatment process and more on their use of high-risk donors. They anticipate that their conspiracy allegations will enable them to defeat the defendants’ statute of limitations arguments, though that hurdle could be defeated through another method as well: as clients die, their statute of limitations window will start again. Finally, the plaintiffs team believes the timing of the alleged dumping, occurring after American hemophiliacs were known to be contracting HIV, will work to their advantage. Still, Lieff admits that it’s never easy to predict the outcome of cases. “You had to be a crazy person to get involved in tobacco,” he says, “but as it turned out, we had a terrific result. Then look at a case like Exxon Valdez, that appears to be clear-cut, and 15 years later we’re still waiting to be paid.” But clearly he’s predicting something positive here. As of early October, Lieff says his firm had spent $12 million in hours and $2 million in costs on the litigation. With a group of diverse clients still growing, and a staff of 12 nurses translating medical records into English, the expenses will continue to soar. Even with a potent strategy bolstered by internal documents, the plaintiffs must make it past several procedural hurdles, including class certification, jurisdiction, liability, and statutes of limitations. Judge Grady is not expected to rule on class certification until later this month or early next year. If it’s denied, Lieff says, his firm is prepared to pay the $300,000 or more in individual filing fees for their clients. Ultimately, the plaintiffs could face a major fight over jurisdiction and standard of law. The defendants are likely to file a forum non conveniens motion for each group of plaintiffs hailing from a different country, arguing that the plaintiffs, as foreigners, should be suing in their own countries. Forum non conveniens gives the courts discretion to decide under what circumstances a case is better tried abroad; motions are sometimes granted out of respect for the foreign courts, or because witnesses and salient facts are located overseas. Historically, the success of these motions has been mixed. Rulings vary depending on the facts of an individual case, and judges have ruled differently on the same kinds of suits brought in multiple jurisdictions. Many plaintiffs’ groups have been granted permission to sue in U.S. courts in the past, including such high-profile plaintiffs as Holocaust victims. Others, like aviation victims, have also had no trouble. Recently, in Pliva v. Baxter International, in the Northern District of Illinois, a motion by Baxter was denied in an action by a Croatian plaintiff over defects in dialysis machines that Baxter had exported overseas. Samuel Issacharoff, a professor at Columbia Law School, believes forum non conveniens motions are more likely to be granted when the court sees a plaintiff’s allegations as a discrete case of individual harm than when plaintiffs make a credible claim of systematic misconduct by an American company with serious consequences abroad. That’s exactly what the plaintiffs’ lawyers assert has happened in the blood cases, and why they believe the cases should be tried in the United States together. In court filings, however, the companies argue that the claims should be — or have been — addressed by the governments or courts of their own countries. In fact, many foreign hemophiliacs have already been compensated in overseas settlements with the American companies. To date, the pharmaceutical companies have paid $1 billion worldwide in settlements to 10,000 litigants, about 4,000 of whom were outside the United States. They’ve settled suits brought by foreign lawyers on behalf of individual hemophiliacs and their families in Germany, Japan, Spain, Taiwan, and Northern Ireland. A number of hemophiliacs, including Haydn Lewis, have filed suit against government agencies in their home countries, alleging negligence. Lewis’ suit against the United Kingdom’s National Health Service settled in 1990; he received 60,000 pounds, based on his three-to-five-year life expectancy at the time. Some countries have filed criminal prosecutions as well. In 1999, former French Prime Minister Laurent Fabius and a member of his Cabinet were acquitted on charges of criminal negligence and manslaughter in relation to transfusions of AIDS-tainted blood. Several lower-ranking officials, including a health minister, were convicted. In Canada, a trial is scheduled for November 2005 against Armour and its executive, Dr. Michael Rodell, charging them with criminal negligence causing bodily harm because of Armour’s failure to notify the Canadian Ministry that its heat-treated product was not killing the HIV virus. There has been no investigation or criminal implication of companies or government officials in the United States. That lack of an accounting, says Lewis, is principally why he’s involved in this litigation. “I want an explanation,” Lewis says. “I want to be able to say to my sons how it happened, and why it happened, and who was responsible.” Elizabeth Amon is a senior reporter at The American Lawyer magazine, where this article first appeared in the December issue.

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