Important note: Information in this article was accurate in 1996. The state of the art may have changed since the publication date.
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The Wall Street Journal - 15 March 1996
Thomas M. Burton, Staff Reporter of The Wall Street Journal
The three Japanese companies are Green Cross Corp., the market leader in making the clotting products in Japan, along with Chemo Sero Therapeutic Research Institute and Nippon Zoki Pharmaceutical Co.
The settlement immediately will cover only those 400 Japanese people with hemophilia who had filed lawsuits against manufacturers. But any of the estimated 1,800 Japanese hemophiliacs who contracted HIV from the clotting products, generically called Factor VIII, are eligible to participate. In the case of patients who have died, their families could share in the settlement.
The total value of the multimillion-dollar settlement will depend on the number of people who sign up. But the accord, approved by courts in Tokyo and Osaka, calls for five companies, including Baxter, of Deerfield, Ill., and Bayer, to participate with the government of Japan in making lump sum payments of about $420,000 to each person with hemophilia who was infected. Thus, if all 1,800 participated, that would mean a total lump-sum settlement plan of about $750 million.
The Japanese government would pay 44% of the settlement amount, with the companies sharing the remaining 56% of the payout. Baxter said it plans to pick up 12.5% of the companies' portion, based on its market share in Japan, while Bayer said it couldn't immediately provide a market share figure. In addition, monthly payments, tentatively set for now at less than $1,500 a month, would be made to living participants who have full-blown AIDS. Baxter said insurance and established reserves should cover its costs, and that it will receive some financial credit for its role in a previous compensation program extended to certain Japanese hemophiliacs.
Baxter and a Bayer unit are among five companies that made the tainted product before a heat-treatment process was instituted that would kill the human immune deficiency virus, which causes AIDS. Factor VIII is made from the pooled blood plasma of thousands of patients and has long been known to transmit hepatitis. During the early 1980s, evidence became stronger that AIDS, too, was a blood-borne illness and that the products were contaminated. At issue is whether the companies and Japanese government acted quickly enough to ensure that a virally inactivated form of the clotting product was available.
Bob Hurley, president of Baxter's Japanese unit, said Baxter's heat-treated product was approved for sale in the United States in March 1983. "It took until July of 1985 for the Japanese government to agree to its sale in Japan," said Mr. Hurley. "That was truly unfortunate."
Indeed, Japanese Health and Welfare Minister Naoto Kan last month conceded the government's responsibility in allowing the contaminated blood-derived products to remain on the market. And the ministry's special investigation task force concluded, also in February, that the ministry knew of the HIV danger from untreated Factor VIII at the time it decided to continue its use.
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