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KEYCODE BAYER #93

THE WALL STREET JOURNAL, 8/11/03

Bayer AG Unit, 4 Others Are Sued Over Medicine

Taiwan Citizens Allege Firms Knew Clotting Drug Could Have HIV Taint

TAIPEI, Taiwan -- Lawyers representing seven Taiwan citizens have filed suit in a California court against the U.S. unit of Bayer AG of Germany and four other pharmaceutical companies, alleging the companies knowingly sold hemophilia medicine that could have been tainted with HIV, the virus that causes AIDS.

The suit, filed Thursday in California Superior Court in Los Angeles, alleges that a Bayer Corp. unit, Cutter Biological, and four other U.S. and U.S.-registered companies sold a blood-clotting injection called Factor VIII in Taiwan in the mid-1980s that they knew could be tainted with HIV. The other companies are Baxter Healthcare Corp.; Armour Pharmaceutical Co.; the Aventis Behring unit of Aventis SA of France; and Alpha Therapeutic Corp. of California, a unit of Japan's Mitsubishi Pharma Corp. whose assets are in the process of being sold off to Baxter and other companies.

The seven plaintiffs include one person who contracted AIDS, allegedly after using the clotting-factor, and his family members, as well as the family members of another person who died of AIDS, allegedly contracted through Factor VIII.

The Factor VIII product was made from donated blood plasma. With the spread of AIDS in the early 1980s, U.S. regulators approved in February 1984 a version of the medication that was heat-treated to kill the HIV virus. The suit alleges that Cutter and the other defendants continued to sell stockpiles of the untreated drug in Taiwan and other overseas markets for more than a year afterward.

Bayer spokesman Michael Diehl said in an e-mail that his company hadn't been formally notified of the Taiwan lawsuit. But he said, "Bayer emphatically denies misconduct in the marketing of these products in the mid-1980s. Decisions made nearly two decades ago were based on the best scientific and medical information of the time and were consistent with the regulations in place at the time."

In 1996 Bayer , Baxter, Armour and Alpha reached a US$600 million (€531 million) settlement of a class-action suit involving about 6,000 U.S. hemophiliacs, or their family members. The suit alleged that the hemophiliacs had been infected with AIDS after using untreated Factor VIII or a similar product. Bayer , which paid $290 million of the total, and the other companies admitted no wrongdoing in the settlement. The infections occurred before the medicines were replaced with heat-treated versions on the U.S. market.

The Taiwan suit differs in that it alleges that Cutter executives knew the untreated Factor VIII was potentially tainted, and contends that the company sold it in foreign markets after the treated version was available to avoid wasting existing stockpiles. John P. McNicholas, an attorney for the seven Taiwan plaintiffs, says the allegations are based in part on Cutter internal documents filed in the U.S. class-action suit.

The Bayer spokesman said that at the time in question, "it was unknown and unknowable if HIV was in the plasma supply. Once the U.S. Food and Drug Administration accepted data indicating that heat treatment offered a new level of patient safety without compromising the therapeutic protein integrity, Bayer acted swiftly and sought regulatory approval of our heat-treated product in other countries around the world. Bound by law and regulatory policy in all countries where we market product, Bayer could only ship heat-treated product to countries where approvals had been granted, and the demand for life-saving Factor VIII continued in countries where registrations weren't yet available." The spokesman added, "There also continued to be a demand for non-heat-treated product, both in the United States and internationally, even after a heat-treated product came on the market."

Mr. Diehl, the Bayer spokesman, said a separate class-action lawsuit related to Factor VIII was recently filed against Bayer in San Francisco, naming 15 plaintiffs from Germany, Italy and the U.K. and claiming to represent other individuals world-wide.

In Taiwan, 53 people contracted AIDS after taking the untreated Factor VIII medication. Between 1998 and 2002, Bayer reached settlements with 49 of them, or their families, without acknowledging wrongdoing, according to a Bayer spokeswoman. The company paid them each NT$2 million ($58,000 or €51,380). The spokeswoman said the company had been unable to reach the others.
By JASON DEAN

PRESS RELEASE:

Lieff Cabraser Heimann & Bernstein, LLP, Announces Filing of Claims In United States District Court On Behalf Of Hemophiliacs Abroad Infected With HIV And/Or HCV Due To Virus Contaminated Blood Products

The Blood Products the Hemophiliacs Used Were Manufactured by American Companies Based in California and Other States

June 2, 2003, San Francisco, CA - Lieff Cabraser Heimann & Bernstein, LLP, announced today the filing of lawsuit, entitled Domenico Gullone, et al. v. Bayer Corporation, et al., on behalf of hemophiliacs, or their survivors and estates, living outside the United States who became infected with HIV and/or Hepatitis C ("HCV") from contaminated blood products manufactured by American companies. The blood products were known as factor concentrate, Factor VIII ("antihemophilic factor" or "AHF") and Factor IX, and were manufactured and sold in the U.S., and exported worldwide.

"Tens of thousands of hemophiliacs globally were infected with HIV or HCV after receiving blood products from blood plasma that was originally manufactured in the United States," stated Lieff Cabraser partner Robert J. Nelson. The complaint alleges that these companies intentionally sold blood factor that they knew or should have known to be infected with the agents that cause AIDS and HCV. "This is a worldwide tragedy," Nelson said. "Thousands of hemophiliacs have unnecessarily died from AIDS, and many thousands more are infected with HIV or Hepatitis C." The lawsuit seeks to require that the American companies that made these contaminated products acknowledge their responsibility to hemophiliacs worldwide and their families.

Each of the representative plaintiffs in the lawsuit have been infected with HIV and/or HCV and reside in the United Kingdom, Italy or Germany. The complaint includes a proposed class action on behalf of persons worldwide with HIV and/or HCV from contaminated American blood products. The American companies, or their subsidiaries, named as defendants in the lawsuit were engaged in the manufacture, production and sale of Factor VIII and IX and/or their plasma components. The defendants include: Bayer Corporation and its Cutter Biological division, Baxter Healthcare Corporation and its Hyland Pharmaceutical division, Armour Pharmaceutical Company and Alpha Therapeutic Corporation.

The complaint alleges that the defendants recruited and paid donors and/or purchased plasma knowingly obtained from the highest-risk populations, including prisoners, intravenous drug users, and blood centers targeting promiscuous urban gays, for the production of Factor VIII and IX. Plaintiffs allege that these companies failed to exclude donors, as mandated by U.S. law, with a history of viral hepatitis. Testing for hepatitis would have substantially reduced the likelihood of plasma containing HIV and/or HCV entering plasma pools.

The complaint further alleges that the defendants misrepresented to public officials and physicians that Factor VIII and IX were safe to use and that they had undertaken effective efforts to reduce the risk to hemophiliacs of developing AIDS and HCV. Plaintiffs charge that when the first evidence that hemophiliacs had died from AIDS surfaced, the defendants acted in concert to avoid recalling Factor VIII and IX, to avoid warning patients of the risks of HIV and HCV infection posed by their products, and to continue to market the products as safe.