The Wall Street Journal - May 30, 1996
Thomas M. Burton, Staff Reporter of The Wall Street Journal

While it's far from certain that the offer made last night will be generally accepted, plaintiffs said the new revisions the companies made to an earlier, tentative offer may be enough to make it fly. Principally, the companies retracted their earlier insistence that they would withdraw their proposal if more than 100 hemophiliacs "opted out" and decided to pursue their own individual litigation. In essence, that provision constituted an effort by the companies to put a ceiling on their total costs.

"This is the first step. What the companies wanted is closure" to the litigation, said Charles R. Kozak, an attorney representing several hundred people with hemophilia. "I think this will fly."

The companies did impose at least one major condition on the offer. Any company may individually back out of a final deal if the number of cases "opting out" exceeds 150. Most lawyers on the plaintiffs' side say they expect the opt-outs to substantially exceed that number. But they said they're encouraged that the companies aren't insisting the deal automatically collapses in that event. If one or more companies withdraw the settlement, the $640 million fund would be reduced by the percentage of the fund those companies were to have paid.

The other companies making the offer are the Alpha Therapeutic Corp. unit of Japan's Green Cross Corp. and Rhone-Poulenc Rorer Inc.'s Armour Pharmaceutical Co. unit. At issue are blood-clotting medications, called Factor VIII and Factor IX, that are made from the pooled blood plasma of thousands of donors.

During the 1980s, the products became infected with HIV, and thousands of people with hemophilia have died of AIDS or contracted the virus.

The companies offered $100,000 for each American claimant up to a total of $640 million. This amount includes administrative costs and lawyers' fees, and the $100,000 may shrink if too many people decide to participate. It's been estimated that between 6,000 and 10,000 of America's hemophilia population got the virus because of the medications. Of these, it's believed that 3,000 or more have died. Under the offer, families could be compensated if their relatives have died.

In a letter to plaintiff's negotiator David S. Shrager in Philadelphia, Sara J. Gourley, a lawyer who served as one of the company negotiators of the offer, addressed the hemophilia community's concerns that more than 6,000 people will sign up. Based on data from the U.S. Centers for Disease Control and Prevention, she said, "We believe that the figure of $100,000 per claimant is realistic and not likely to be reduced."

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