AstraZeneca Given More Time to Settle 6,000 Seroquel Lawsuits - BusinessWeek

Sept. 1 (Bloomberg) -- AstraZeneca Plc was given more time to settle 6,000 lawsuits claiming its antipsychotic drug Seroquel causes diabetes after a group of judges decided not to send the cases back to their home courts for trials.

The U.S. Judicial Panel on Multidistrict Litigation yesterday vacated orders sending the cases, consolidated in federal court in Florida, in courts across the U.S. after a judge said the move might hinder settlement negotiations. London-based AstraZeneca has settled about two-thirds of the 26,000 Seroquel cases pending against it.

“A remand at this juncture would likely disrupt the settlement dialog,” U.S. District Judge Anne Conway, based in Orlando, Florida, said in an Aug. 30 order asking the judicial panel to forgo remands. Returning the cases could “stall negotiations altogether,” Conway said.

AstraZeneca officials said they would continue to work with a mediator to resolve the remaining lawsuits over Seroquel.

“We remain committed to a strong defense effort, but will continue to participate in the court-ordered mediation process,” Tony Jewell, a U.S. spokesman for the drugmaker, said in an interview yesterday.

AstraZeneca, the U.K.’s second-biggest drugmaker, still faces at least 8,000 cases in both state and federal courts alleging Seroquel causes diabetes in some users. The drugmaker won the first jury trial over those claims in state court in New Jersey in March.

$11,000 Payouts

Seroquel, with sales of $4.9 billion last year, is the company’s second-biggest seller after the ulcer treatment Nexium. AstraZeneca trails only London-based GlaxoSmithKline Plc among U.K. drug companies.

AstraZeneca officials said last month that they agreed to pay about $198 million to settle 17,500 suits over Seroquel. Those accords provide average payouts of about $11,000 for former users of the drug.

Having the 6,000 cases go back into the court-ordered mediation process won’t improve the chances they will settle at those prices, said Ken Bailey, a Houston-based lawyer who represents former Seroquel users in most of those suits.

“I’ll participate in the mediation process and either they will be settled or they won’t, but in my opinion, they won’t be settled” if AstraZeneca continues to offer only $11,000 a case, Bailey said.

Michael Kelly, a Wilmington, Delaware-based lawyer for AstraZeneca who serves as the drugmaker’s lead negotiator in the settlements, didn’t return a call for comment on the remand or settlement talks.

Mediation Process

Since 2006, Conway has overseen the federal cases during pre-trial evidence gathering, part of the Multi-District Litigation program intended to save money by streamlining document exchanges and avoiding duplication.

In November, Conway said she would ask the MDL panel to remand the cases to their trial courts since pre-trial evidence exchanges had been completed in the cases.

At the same time, she asked Stephen Saltzburg, a George Washington University Law School professor, to serve as mediator and see if the cases could be settled.

Saltzburg asked Conway to withdraw her recommendation that the cases be remanded to facilitate the settlement talks, the judge said in her Aug. 30 order.

“Retaining these cases as a coordinated action subject to continuing court-ordered mediation is vital to maintaining the momentum of the ongoing settlement negotiations,” Conway said.

After Conway withdrew her recommendation that the cases be remanded, the MDL panel wiped out earlier orders sending them back to their home courts. The orders hadn’t been made final because AstraZeneca’s lawyers objected to them, according to court filings.

The case is In Re Seroquel Products Litigation, 06-MD- 01769, U.S. District Court, Middle District of Florida (Orlando).

--With assistance from Margaret Cronin Fisk in Southfield, Michigan and Doris Bloodsworth in Orlando, Florida. Editors: Stephen Farr, Fred Strasser.

To contact the reporter on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

via businessweek.com

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