Chicago Tribune (CT) - SATURDAY, April 20, 1996 Edition: NORTH SPORTS FINAL Section: BUSINESS Page: 1 Word Count: 593
Chuck Hutchcraft, Tribune Staff Writer.
Baxter, Bayer Corp., Armour Pharmaceutical Co./Rhone-Poulenc Rorer Inc. and Alpha Therapeutic Corp. are offering to pay at least $100,000 each to 6,000 people in the United States who contracted the AIDS virus from non-heat-treated blood-clotting products supplied by the companies between Jan. 1, 1978, and June 30, 1985.
"A claimant also could be a spouse, child or other who was infected as a direct result of his or her relationship with an HIV-positive claimant with hemophilia, or the legal representative" of a plaintiff who has died as a result of the virus, attorneys for the four companies said in a letter to plaintiffs' counsel of record.
The four health-care companies also are offering to pay $40 million in legal fees and administrative costs. The attorneys said in their letter that the $600 million would be divided evenly among the claimants and would not be reduced if there are fewer than 6,000.
The attorneys said that "because of the substantial size of the proposal, the $640 million is non-negotiable."
They also requested that the plaintiffs' attorney respond to the proposal by May 20. The settlement would absolve the companies of any future liability.
Baxter's share of the settlement would be $128 million.
Baxter has $378 million in reserves for blood-therapy litigation worldwide. Of that, insurance would pay 80 percent, according to Baxter officials.
Baxter stock closed at $43.87 a share Friday on the New York Stock Exchange, down 12 cents.
Last month, Baxter Healthcare, a unit of Deerfield-based Baxter International Inc. joined with the Japanese government and four other drug companies to make one-time payments of $420,000 to possibly 1,800 Japanese hemophiliacs who contracted the AIDS virus from contaminated blood products.
In that settlement, Baxter is to pay 12 percent of the manufacturers' share, which is 56 percent of the total settlement.
At the time, Baxter still faced 350 similar lawsuits and 860 claims filed against the company in the United States, Canada, Ireland, Italy, Spain, Japan and the Netherlands.
Baxter earlier agreed to settle a lawsuit in Germany, paying $12 million over four years, and one in Canada, in which it is to pay a total of $3 million.
Baxter said in a statement that the settlement is the best way to resolve the issue so that immediate relief can be provided to the HIV-infected hemophiliacs, while also putting an end to the protracted litigation.
Asked if Baxter is seeking similar settlements to the other hemophiliac cases, Jessica Fisher in investor relations for Baxter, said, "We would like to," adding that a settlement such as the one proposed in the United States "is a fair way to cover everybody."
"Baxter has been a leader in the treatment of hemophilia for more than 30 years," John Bacich, president of Baxter's Hyland division, said in a statement. "We deeply regret that early versions of the therapies that were designed to save lives unknowingly carried the AIDS virus. The virus had entered the blood supply before it was identified and this tragedy could not have been predicted or prevented."
Jay B. Silverman, an analyst with Schroder Wertheim & Co., said Baxter is working to put the "tainted liability" behind it, especially as it moves ahead to split off its health-care cost-containment business later this year.
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