1990s: Painful Questions and Heartbreaking Answers

Many of the soldiers were coming down with hepatitis, a viral inflammation of the liver. The men had served in different parts of the world but had one thing in common: Battlefield transfusions.
The plasma most received had been drawn from a number of different pools, each made up of donations from dozens of people.
The implications soon were clear: Hepatitis was spreading through plasma transfusions. And plasma pools could become tainted if only one of the dozens of donors carried the virus.
In 1945, Rappaport went public with his findings, which by then were apparent to many other doctors. His study, published in July 1945 in the Journal of the American Medical Association, concluded not only that transfusions were to blame but that the \”pooling of plasma probably increases considerably the incidence of jaundice (hepatitis) among the recipients.\”
In a larger study a year later, he proposed more stringent screening of donors and urged immediate research on ways to kill viruses in blood products.
\”It is likely that this syndrome will be encountered . . . more frequently in the future,\” he wrote.
Half a century later, that warning is at the heart of scores of lawsuits involving the spread of another virus through blood. This time, the patients are hemophiliacs, and the disease is AIDS.
A key issue in the litigation is why heat-treating techniques that killed hepatitis – techniques first used by Army-financed scientists back in the 1940s – were not perfected until 1983 for blood-clotting products used by hemophiliacs. By 1983, most of the nation\’s hemophiliacs had contracted the AIDS virus through blood-clotting medicine made from pooled human plasma.
An estimated 8,000 to 10,000 U.S. hemophiliacs were infected with HIV, the AIDS virus, in the late 1970s and early 1980s. Also infected were thousands of hemophiliacs in Canada, Europe, Japan and elsewhere who used American products – as well as some wives, girlfriends and newborns, who contracted HIV from them. (Hemophilia, caused by too few clotting proteins in the blood, primarily affects men.)
Today, hemophiliacs and their loved ones are demanding to know why the federal government did not require sooner that manufacturers purify the clotting products.
The manufacturers say they did all they could to make hemophilia medicines safe, given what was known at the time. They also say that until the early 1980s, they did not know how to kill viruses without destroying plasma\’s blood-clotting proteins.
The history of how these decisions were made, and of how the government failed to protect the lives of thousands of people adequately, is of more than academic interest, because new viruses – and newly discovered forms of existing ones, including HIV and hepatitis – are appearing all the time. At stake could be the health not only of hemophiliacs but of 40 million other people who receive plasma products each year.
At a recent conference in Washington, blood experts from around the world said it was only a matter of when – not if – the next dangerous virus gets into the blood supply.
* In early 1940, as it became apparent that the United States might enter the war, the Army\’s medical department started planning for a serious problem: shock resulting from battlefield blood loss.
Whole blood, the doctors feared, was too fragile to survive the trip to faraway war zones. So in 1941 and 1942, military records show, seven commercial laboratories were hired to freeze-dry plasma, the yellowish, fluid portion of blood.
Among the labs were Cutter and Hyland, two of the four manufacturers that are now defendants in the lawsuits filed by hemophiliacs. Today, Cutter is a subsidiary of Miles Inc. of Pittsburgh, while Hyland is part of Baxter Healthcare Corp. of Deerfield, Ill.
As the war raged and casualties mounted, so did hepatitis cases.
World War II marked the first time that blood products were used widely, and they helped save countless lives. But in Iowa, Capt. Rappaport knew that other doctors, in the United States and in Europe, were observing outbreaks similar to his. The medical literature included several reports on what then was called homologous serum jaundice, or what\’s now known as hepatitis B.
Rappaport\’s paper about his patients was published in 1945. In a larger study a year later, he found that \”hepatitis following the use of pooled plasma occurred 14 times as frequently as after the therapeutic use of whole blood.\”
Seventeen years after Rappaport published his study, his conclusions were supported by the Army\’s Office of the Surgeon General, which reported that \’\’numerous\” wartime cases of homologous serum jaundice had resulted from transfusions. By late 1945, \”pooled plasma was indicted as the vehicle,\” reads the 1962 Army report.
The report goes a step further, concluding that the larger the plasma pool, the more likely it was to contain hepatitis. During the war, according to the report, each pool contained plasma from 50 or more donors. And the pools grew progressively larger as the war went on.
\”In retrospect, what happened was clear,\” the report continues. \”A single transfusion of blood is likely to cause jaundice in only a small percentage of the recipients. When, however, blood is pooled, as it is when plasma is processed, the chances of contracting jaundice are correspondingly increased.\”
Attempts, many funded by the military, were made in the 1940s to kill hepatitis in whole plasma while retaining all its therapeutic benefits. The studies were unsuccessful, according to military records, because the ailment\’s cause was unknown and because no laboratory animals were known to be susceptible to the virus.
Experiments with human volunteers from the military, prisons and state hospitals were abandoned after it became clear that plasma-induced hepatitis \’\’carried a high risk of mortality\” and illness, one study said.
Once the conclusions drawn by Rappaport and other researchers became well known, plasma fell out of favor as a substitute for whole blood. By then, the war was winding down and doctors had an alternative product: albumin, a plasma component.
Doctors knew that albumin, because it was heat-treated, was unlikely to cause hepatitis. Heating at 140 degrees Fahrenheit for 10 hours killed the virus but did not kill albumin\’s therapeutic proteins. Most scientists thought the same temperature would render plasma worthless.
Interest in plasma was revived in 1950 when an Army-funded team led by J. Garrott Allen, then of the University of Chicago, reported that prolonged heating could kill hepatitis. Allen\’s method, which called for heating liquid plasma at about 90 degrees Fahrenheit for between three and six months, was reaffirmed in followup studies.
The method, though, also killed blood-clotting proteins. Allen was not overly concerned about this because he was seeking primarily to prove that liquid plasma was still useful as a substitute for whole blood.
By the time Allen\’s study was published, the Korean War had begun. Army doctors were treating the wounded with pooled plasma that had been irradiated with ultraviolet light in an attempt to kill hepatitis. It didn\’t work: Nearly 22 percent of the men who received plasma contracted hepatitis.
In 1958, two more studies supported Allen.
Some blood banks began using his technique.
Many researchers took aim at hemophilia, an inherited condition, usually passed from mothers to sons, in which there are few or no clotting proteins in the blood. The scientists tried to separate the proteins from plasma, with little success.
Then, in 1964, hemophilia treatment was revolutionized. Stanford University scientist Judith Pool – who had studied under Allen – and her colleagues developed cryoprecipitate, a human plasma residue rich in clotting proteins. It came from a single donor or a few donors – not from a plasma pool – and so was less likely to carry hepatitis or other viruses.
For the first time, hemophiliacs could treat their disease with injections at home instead of in a hospital.
Two years later came the next major stride: Baxter\’s Hyland division further refined cryoprecipitate to make the world\’s first freeze-dried blood- clotting concentrate. It was called Factor VIII, after the most common clotting protein.
The products were made from increasingly larger plasma pools, which made production more economical. While the Army had worried about pools with up to 50 donors, the new clotting drugs were made from pools with thousands – eventually tens of thousands – of donors.
Then came a 1968 study by Allan G. Redeker, a University of Southern California physician who asserted that Allen\’s heating method did not work so well after all. Experts called for renewed caution with plasma.
The National Research Council, which had endorsed Allen\’s heating technique, changed its mind, saying the Redeker study meant that \”serious doubt is cast on the safety of all pooled human-plasma preparations.\”
The council said it saw few good reasons to use whole plasma, especially since albumin was safer. Heat-treated plasma was worthless for blood clotting since it was well known that heat killed those proteins, the council noted.
Allen, who by then had moved on to Stanford, countered that Redeker\’s work had contained serious flaws. And in an Army-financed study published in 1969, Allen wrote that the National Research Council had not done its homework.
He said Redeker had relied on plasma from two commercial operations, Hyland and Courtland Laboratories, in Los Angeles. Those labs, he said, used large pools of plasma from \”skid row\” donors, who sold their blood for money. The pools, he said, were therefore far more likely to carry disease and had to be heated longer.
What\’s more, Allen said, executives at the two labs admitted to him that
neither the council nor government regulators had made any effort to inspect company records. Allen said there was evidence that the labs had not adhered to his standards.
By the time Allen\’s rebuttal was published, the National Institutes of Health had already approved the first freeze-dried blood-clotting concentrates for sale.
They were not heated.
And they were made from pools containing the plasma of thousands of donors, most of them paid.
In 1970, a study by researchers at the National Institutes of Health, published in the Journal of the American Medical Association, warned that just one unit of hepatitis-contaminated plasma could contaminate an entire pool. Diluted 10 million times, it still was infectious.
By the mid-1970s, most American hemophiliacs were taking the new, easy-to- use concentrates, and government-funded hemophilia-treatment centers had been established to offer comprehensive care and training in use of the medicines. Life expectancy and life quality for hemophiliacs had improved considerably.
It wasn\’t long, though, before hepatitis from blood products had become a leading killer of hemophiliacs. But the government, manufacturers of the blood-clotting concentrates, and some doctors called this an acceptable risk, given the medicine\’s huge benefits, and federal regulators allowed the medicines to be sold, with labels warning about hepatitis.
The drug industry said it needed too much plasma to rely solely on volunteer donors.
No aggressive action was taken or demanded by the government to kill hepatitis in blood products.
The companies were ordered to use the best available donor-screening tests for hepatitis B, but the tests were not sensitive enough to detect the virus every time.
Some scientists, meanwhile, said the products were dangerous.
In a 1974 letter to federal health officials, Judith Pool, of Stanford, warned against a proposed national blood policy that allowed the continued use of paid donors for hemophilia drugs. By then, studies had found a strong association between paid donors and hepatitis in recipients.
Paid donors were more likely to harbor viruses because so many lived in poor areas that were breeding grounds for disease, the studies said. The World Health Organization objected, in particular, to what it called the exploitation of donors in Central and South America, Asia and Africa, where numerous commercial plasma-collection centers had been set up in the 1960s and \’70s.
The proposed policy, Pool wrote, \”in no way requires or even encourages the use of volunteer blood . . . but assumes a continuation of the dangerous, expensive, wasteful and unethical purchase of plasma by pharmaceutical houses. . . .\”
By 1975, the World Health Organization was advocating an all-volunteer system of plasma donation. Federal regulators agreed with the industry\’s argument that the benefits outweighed the risks.
A 1976 government report on the problems of hemophilia therapy recited this U.S. Food and Drug Administration definition of safety for biologic products: \’\’Safety means the relative freedom from harmful effect to persons affected by a product when prudently administered, taking into consideration the character of the product in relation to the condition of the recipient at the time.\”
At a meeting in 1977, the World Federation of Hemophilia called on the makers of clotting concentrates to kill viruses in their products for the sake of \”future generations of persons with hemophilia.\” The organization repeated its message in 1979, urging more speed.
The federal government stood by its policy.
In July 1982, the U.S. Centers for Disease Control announced the first three AIDS cases in hemophiliacs.
There still were no heated clotting medicines sold in the United States.
One was available in Germany.
The U.S. firms, which knew of the German drug, were moving quickly to develop their own. A January 1983 internal Cutter memo urged speed in developing a heated product. It cited a projected loss of business should competitors get there more quickly.
The FDA approved the first heated clotting drug in March 1983. Made by Baxter, it was heated at 140 degrees Fahrenheit – as had been done with albumin since the 1940s – for 72 hours. Refinements in the heating process protected the clotting proteins.
In May 1983, another Cutter memo noted the company had been beaten to the marketplace. It called for a temporary solution \”that will preserve our market position.\”
In 1985, the FDA approved a solvent-detergent method of purging viruses
from plasma that had been developed by Bernard Horowitz and Alfred Prince of the New York Blood Center. Today, that method is considered a world standard.
In an interview, Horowitz said that researchers theoretically could have tried sooner to kill viruses in clotting medicines but that they had no way of knowing that AIDS was on the horizon.
\”Keep in mind that virus killing isn\’t new,\” he said. \”The thing was: Can you do it without killing the (clotting) protein? In 1980, it was considered a very difficult problem.\”
As it turned out, he said, \”it was less of a problem than predicted.\”
Douglas Bell, a spokesman for the American Blood Resources Association, an industry group, said the task was far from simple. Besides figuring out the proper temperature and time, there were stabilizing compounds to be selected. Researchers also had to determine whether the body\’s immune system would reject a heated clotting protein as a foreign invader, he said.
The testing required for government approval, first on animals and then on humans, was time-consuming.
\”It took years to do all this work, as required by the FDA,\” Bell said.
Thomas C. Drees says hepatitis was considered an unfortunate but unavoidable downside of the business. He was the first president of Alpha Therapeutic Corp., a Los Angeles maker of blood-clotting medicines.
In an interview, Drees, now a paid consultant for HIV-infected hemophiliacs, said that when he joined the industry in 1972, \”it was sort of accepted that all of the workers in our plant were positive for hepatitis B, and so were all the hemophiliacs, and it was accepted that all the hemophiliacs would probably die of hepatitis at some time in their lives.\”
One published study, performed by federal health researchers from 1968 to 1971 at an unidentified manufacturing company, concluded that hepatitis B was a common occurrence in plasma-industry workers. Similar studies already had been done at blood banks and hospitals.
The government study found that the most susceptible employees were those who performed \”plasma dumping\” – opening bottles and slashing open plastic bags of plasma and dumping the contents into larger containers. The unidentified company had a seniority policy that made it more likely that new workers would be assigned to plasma dumping, according to the study.
Drees said the U.S. government and industry reasoned that most hemophiliacs would live longer with the medicine than without it, making the risks worth the dangers.
In the 1970s, he said, heat-treating was not pursued with urgency since earlier experiments had shown that heat destroyed the clotting proteins\’ potency.
\”But when AIDS came on the scene . . . then they started heat-treating – and, son of a gun, it got rid of most of the AIDS,\” Drees said.
Had the government demanded heating earlier to kill hepatitis B, he said, \’\’I think that would have saved the game\” when AIDS erupted.
But officials at the FDA \”tended to drag their feet\” – and were too chummy with industry – he added.
The FDA declined comment.
Alpha spokesman Ed Colton called Drees a \”renegade\” who left the company in 1983 when his contract was not renewed. Colton termed Drees\’ statement about hepatitis-exposed employees \”a wild assumption\” for which there was no evidence.
Even if some workers turned out to have the disease, \”it may be unrelated to working\” at the plant, Colton said. Citing ongoing litigation, he declined to respond to other questions.
Records from lawsuits filed by hemophiliacs show that Drees was not the only one who thought more could have been done in the 1970s. In a sworn February 1987 statement taken as part of a Kentucky lawsuit, Allen, by then retired as head of surgery at Stanford, spoke about his work with heat- treating.
\”No medical, economic or social reason could justify ever using . . . unheated, pooled plasma or its clotting products,\” he said. \”Large pools are highly profitable, but they are medically bankrupt.\”
In a deposition taken later that year for the same case, Allen said he first wrote to the Army about heat-treating plasma in 1940, a year before he started his Chicago study. He also said in the deposition that in about 1971, he urged a top industry official to heat his company\’s clotting products.
In a 1993 deposition taken in a Missouri lawsuit, Charles M. Heldebrant, director of research and development for pharmaceuticals for Alpha, said his company never worked on killing viruses until mid-1982.
The directive to begin research on heat, he said, came from the marketing department, whose job was to keep up with competitors.
It took the Alpha scientists only about three or four months to develop a process, Heldebrant said. It involved heating at 140 degrees Fahrenheit for 20 hours.
Time and temperature were not the only issues. He said they also had to purify the concentrates further. As it turned out, he said, the purer product was easier to heat-treat.
During the deposition, a lawyer for an HIV-infected hemophiliac asked Heldebrant what technology he had used that could not have been developed years earlier.
\”Absolutely nothing,\” Heldebrant replied.
Alpha spokesman Colton, asked to comment on Heldebrant\’s testimony, said the responses were only one small piece of the proceeding.
\”It\’s difficult for me to respond . . . when you are bent at looking at the 1 percent that entices you,\” he said.
The amount of time it took to develop a heated product proved crucial
because heat, scientists were to learn, killed more than hepatitis. It also killed HIV – the virus that causes AIDS.
In fact, HIV was even more susceptible to heat than was hepatitis.
In 1993, a class-action lawsuit was filed in Chicago on behalf of all U.S. hemophiliacs who contracted the AIDS virus from clotting medicines. The suit\’s central contention was that drug companies had sold HIV-tainted products even though they had reason to know that there were safe methods by which to cleanse them.
The defendants included the four U.S. companies that made clotting drugs in the late 1970s and early 1980s: Cutter and Hyland, whose labs processed plasma during World War II, and Alpha Therapeutic and Rhone-Poulenc Rorer Inc. of Collegeville, along with its Armour Pharmaceuticals subsidiary.
The fifth defendant was the National Hemophilia Foundation. The plaintiffs said the foundation was too financially dependent on the companies to be an effective advocate for hemophiliacs. The foundation denied that, insisting that it believed the products\’ benefits had outweighed their risks.
Last month, a federal appeals panel threw out the class certification, saying the lawsuit might bankrupt the U.S. plasma-products industry, which has annual worldwide sales in excess of $2.4 billion. The case is proceeding with fewer plaintiffs and the decertification is being appealed.
The defendants deny any wrongdoing and are vigorously challenging the lawsuits. They say they acted promptly once the risk was known.
\”We have people here who are really wringing their hands over all of this,\” said Daniel McIntyre, a Miles Inc. spokesman. \”They thought they were doing God\’s work.\”
William Mutert, vice president of marketing for Baxter\’s Hyland division, recalled his anguish when, as a camp counselor for children with hemophilia, he learned that some boys had AIDS.
\”It was really, really hard to see them,\” he said, \”after they were doing so well in the \’70s.\”
The drug companies estimate that they have been named as defendants in 300 lawsuits involving 400 plaintiffs. Of the 13 cases in which verdicts have been returned, 11 have favored the companies. The one case they lost is under appeal. A new trial was recently ordered in the other case.
The companies have prevailed for a variety of reasons. Some plaintiffs have failed to sue within the time allowed by law. Other suits failed because most states, Pennsylvania and Delaware among them, have what is known as blood- shield laws. (New Jersey does not.) Those laws define blood-clotting drugs as services, not products, so, by definition, there can be no product liability.
The companies also have argued successfully that their manufacturing procedures met industry and government standards.
Before the class was decertified, the hemophiliacs rejected a partial settlement from Armour and Baxter, which offered up to $160 million. After all fees had been paid, that would have been about $25,000 per person.
As for government action, at least 17 other nations have set up programs to compensate HIV-infected hemophiliacs. In February, a U.S. representative from Florida introduced a bill in Congress that would pay $125,000 to each U.S. hemophiliac who contracted HIV from clotting medicines. Also eligible would be hemophiliacs\’ infected spouses and children.
Today\’s clotting drugs are considered much safer. Donors are screened, and their blood is tested. The products are heated or, more recently, treated with a detergent-solvent method designed to cleanse blood of such viruses as HIV and hepatitis B and C.
The newest, purest medicines are genetically engineered – but expensive – and some insurers are reluctant to pay for them.
Few hemophiliacs contracted HIV after the arrival of heated medicines, but the advances have not eliminated the possibility of contamination. Recent reports to doctors from the FDA and other researchers cite various plasma products – hemophilia medicines, albumin, and immune globulins – found to harbor hepatitis A, hepatitis C or parvovirus.
Albumin is used to treat shock, trauma and burns. It is also used during surgery. Immune globulins treat a variety of ailments, including measles, German measles, chicken pox, rabies, tetanus and smallpox.
\”Future concern must turn to \’new\’ infections,\” Roger Y. Dodd, head of the transmissible-diseases department of the American Red Cross, wrote in a paper presented at an international conference on viruses and blood held last October in Washington.
The conference ended with a panel discussion, during which one of the major topics raised was what the medical community would do when what one panelist dubbed the next \”Martian virus\” came out of nowhere and entered the blood supply.
Panelist James P. AuBuchon, head of the blood bank at Dartmouth-Hitchcock Medical Center, pointed out that solvent-detergent killed only viruses with a certain type of coating, known as lipid envelopes.
\”There\’s nothing to say the next AIDS-like virus . . . will have a lipid envelope,\” he added.
There also have been reports from government and academic researchers of newly discovered viruses in blood, including a virus dubbed hepatitis G and an HIV strain not easily detected by tests. Hepatitis G has been found in patients around the globe.
Frank Kung, whose California company Genelabs Technologies Inc. collaborated with the government to identify hepatitis G, says the virus, like other bloodborne hepatitis, appears linked in severe cases to liver cancer and cirrhosis.
Is there a hepatitis H?
\”We really do not know until we find the next one,\” Kung said.
Even so, the government seems to have learned little from its failure to prevent the tragedy that has decimated the hemophilia community.
In December, the FDA\’s Blood Products Advisory Committee declined to recommend the recall of products containing the plasma of two donors who later died from Creuzfeldt-Jakob disease.
An FDA official said the panel\’s theory was that the products probably were too thoroughly processed and diluted for any of the abnormal protein that causes the rare, usually fatal, disease to survive.
The panel\’s recommendation was denounced by the National Hemophilia Foundation and the Committee of Ten Thousand, a Boston-based activist group that spearheaded the class action and takes its name from the number of hemophiliacs infected with HIV.
Last month, the FDA asked the advisory committee to consider whether smaller plasma pools should be used for hemophilia medicines to reduce the risk. The committee recommended against it, primarily because of the higher cost. It voted for broadly worded virus-warning labels on plasma derivatives.
More than three years ago, the FDA asked manufacturers to virally
inactivate all plasma products. The agency issued a reminder a year ago. It has yet to be done.
An FDA spokesperson declined to comment for this article.
In 1993 testimony before a House subcommittee, FDA Commissioner David A. Kessler said that he believed his agency had erred in its relationship with the blood industry.
The FDA\’s reliance upon voluntary compliance was \”emblematic of our collegial approach to regulated industry at that time,\” he said. \”Those days are behind us.\”
Kessler volunteered, though, that when his wife recently underwent surgery, she stored her own blood in advance – just in case.

Title: Health Officials Dropped Warning For Hemophiliacs 
By: Donna Shaw
Date: May 23, 1995
Source: The Philadelphia Inquirer

She also announced that the Food and Drug Administration\’s Blood Products Advisory Committee no longer would have any voting members from industry or even members with \”the appearance of a conflict of interest resulting from their connection to the blood industry.\” Industry members will be nonvoting advisers to the committee, Shalala said.
\”Blood safety must never again be handled as a secondary issue,\” she said in testimony before a House subcommittee. \”I am elevating it to the highest level of the department.\”
Shalala named Dr. Philip Lee, the HHS assistant secretary for health, as her blood-safety director.
She also created a blood-safety committee to assist Lee; it will include the heads of the FDA, the National Institutes of Health, and the Centers for Disease Control and Prevention.
Shalala\’s moves received cautious praise from hemophilia activists and doctors who also testified at the hearing, which was held by a subcommittee of the House Committee on Government Reform and Oversight. But they cautioned that the new measures would be effective only if industry was not permitted to dominate Lee\’s safety panel.
\”Our big concern is if we\’re going to set up a council that mimics what we\’ve seen in the past,\” said Corey Dubin, a California hemophilia activist who contracted the AIDS virus and hepatitis from blood-clotting products.
In the late 1970s and early 1980s, between 8,000 and 10,000 hemophiliacs were infected with the AIDS virus from tainted blood products. An additional 12,000 people received HIV-infected blood transfusions.
An unknown additional number – so poorly defined and studied that officials could put it only at somewhere between 100,000 and 200,000 – are believed infected with Hepatitis C from blood and plasma products. There is little that doctors can do to treat or cure such patients, and treatments intended to
inactivate viruses don\’t always work, the officials said.
Shalala\’s moves were the latest in a series of reforms in response to a July report by the Institute of Medicine (IOM) blaming government regulators for not taking stronger action in the early 1980s to prevent thousands of deaths from HIV-tainted blood products. The report also was sharply critical of the plasma-products industry, which makes hemophilia-clotting medicines and other plasma products.
Echoing the findings of that report, Shalala said a \”lack of leadership\” in the early 1980s contributed to the problems and that \”some key political leaders were openly hostile\” to intervention because the first victims were gay.
\”It is clear that the history is a sorry history that we do not want to repeat,\” she said.
The American Blood Resources Association, which represents the plasma- products industry, said in a statement yesterday that it supported \”in principle\” many of the institute\’s recommendations.
\”At the same time, we must make clear that many of IOM\’s \’findings and conclusions\’ are incorrect and without foundation,\” the group said in a prepared statement.
The FDA Blood Products Advisory Committee, long dominated by experts with industry ties, has been a particular target of criticism from hemophilia activists.
For example, at its last meeting, held in June, the panel agreed unanimously that a new HIV blood-screening test was more effective than previous versions. But in a subsequent vote after heated debate, it refused to recommend that the test be required to screen blood donors at blood and plasma collection centers, deciding that the public-health benefit did not justify the expense.
The committee was disbanded soon afterward and, in August, FDA Commissioner David A. Kessler rejected its advice on the screening test. He also overruled it on another issue, saying the FDA would recommend the recall of any blood products that might contain the rare, but fatal, Creutzfeldt-Jakob disease.
Shalala said that when the committee is re-formed, it will have more consumer representation and a permanent member from the Centers for Disease Control, the agency that was ignored when it sounded the first alarm on AIDS and blood in the early 1980s.
Lee said his blood-safety committee would look at broader ethical and social-policy issues involved in maintaining an adequate blood supply and, thus, not conflict with the FDA advisory panel, whose function is to advise regulators.
Asked if she endorsed the Ricky Ray Hemophilia Relief Fund Act, a bill that would provide financial compensdation to HIV-infected hemophiliacs, Shalala said HHS officials \”have not reviewed that issue.\” But she and Lee said they would be willing to talk to Congress about it.
In Philadelphia last night, at the opening of the National Hemophilia Foundation\’s annual meeting, the crowd applauded noisily when told that the Ricky Ray bill had gained 135 co-sponsors in the House. It needs 218 to be brought to the floor for a vote.

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Title: Maker Of HIV-Tainted Drug To Pay Its Japanese Victims
By: Donna Shaw
Date: February 27, 1996
Source: The Philadelphia Inquirer 

Title: Settlement Offer In Hemophiliac Suit Raises Painful Questions 
By: Donna Shaw
Date: April 21, 1996
Source: The Philadelphia Inquirer 

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Title: Bad Blood Has Left Her Life In Ruins
By: Donna Shaw
Date: June 20, 1996
Source: The Philadelphia Inquirer 

Last December, Corey Dubin, a hemophiliac infected with the virus that causes AIDS, met for lunch at a Carrow\’s restaurant in Camarillo, Calif., with John Bacich, the president of a Baxter International Inc. unit that makes blood-clotting products.

Mr. Dubin, like an estimated 6,000 to 10,000 hemophiliacs nationwide, became infected with H.I.V. after receiving a tainted clotting substance made by Baxter and three other companies in the late 1970\’s and early 1980\’s. Hundreds of victims had sued. But statutes of limitations prevented thousands more from bringing claims. Mr. Dubin however had not come to lunch to pick a fight. Rather, dissatisfied with the way key plaintiffs\’ lawyers were handling the litigation, he was on a stealth mission to negotiate, for all those infected, a settlement with the four companies without the knowledge of key plaintiffs\’ lawyers.

I told him they were going to have to live with us as customers when all the high-powered litigators were gone,\” said Mr. Dubin, a 41-year-old former journalist from Goleta, Calif., recalling the lunchtime conversation with Mr. Bacich. \”If you buy a Pinto from Ford that blows up, you can tell Ford to go to hell. But I don\’t have that luxury.\”

In many cases of mass litigation, corporations are able to buy themselves settlements that enrich lawyers but leave the victims — faceless names on the cover sheets of legal documents — with a pittance. In the hemophilia litigation, some claimants jumped off the page to try to influence the outcome of an emotionally charged dispute.

The result of their revolt was a legal free-for-all for plaintiffs, lawyers and companies alike. United by their disease, hemophiliacs were divided between activists seeking to squeeze the maximum settlement out of the drug makers and others willing to accept less money so that the sickest among them, dying at the rate of one a day, could get some cash. Some actors included Mr. Dubin, president of the Committee of Ten Thousand, an activist group; Jonathan Wadleigh, the committee\’s founder; Robert Baldwin, who gained prominence as a counselor for hemophiliacs, and David Shrager, a plaintiffs\’ lawyer who guided the case until the activists challenged him.

The defendants — Baxter; Bayer A.G. of Germany; Rhone-Poulenc Rorer Inc., a unit of Rhone-Poulenc S.A. of France, and the Alpha Therapeutic Corporation, a unit of the Green Cross Corporation of Japan — were also roiled by confusion. Today they are operating in unison. But in the past they often ignored solidarity to protect their own interests, individually discussing settlements, withdrawing them or joining together in various combinations.

In the end, the Committee of Ten Thousand failed to negotiate a deal alone. But its leaders insist their initiative was not in vain. At the very least, they say, they galvanized victims to press for higher compensation. And, according to Baxter documents, they came close to a settlement that could have required Baxter to pay out more than it will under industry\’s offer last month of $100,000 for each claimant, up to a maximum of $640 million. Hemophiliacs are expected to be polled soon on their interest in the deal.

But some like Mr. Baldwin contend that the activists may have scuttled earlier deals that could have gotten money quickly to those who desperately needed it. \”I\’ve had mothers calling me saying that they\’d be happy to get $30,000 for their son so they can buy him a new car before he dies,\” said Mr. Baldwin, whose brother, also a hemophiliac, died three years ago of AIDS. It is estimated that more than 2,000 H.I.V.- infected hemophiliacs have died.

Hemophiliacs, who suffer an inherited disorder in which the blood\’s clotting ability is impaired and excessive bleeding results, occupy a unique chapter in the AIDS crisis. Their fatal infection was caused by the very clotting substances, known as Factor VIII and Factor IX, that they took to save their lives. And unlike many AIDS-afflicted homosexuals, most hemophiliacs kept a low profile early on, fearful of exposing their conditions.

By the early 1990\’s, however, activists discovered that Government regulators and industry officials had known since the early 1980\’s that clotting products posed an AIDS infection threat. The National Hemophilia Foundation, a research and lobbying group, also understated infection risks in the early 1980\’s, according to a 1995 report by the Institute of Medicine of the National Academy of Sciences.

The disclosures led to the creation of activist groups like the Committee of Ten Thousand. At annual meetings of the National Hemophilia Foundation in early 1990\’s, activists parked hearses outside hotels, wore death masks and threw fake blood on industry representatives. And even moderates like Mr. Baldwin began pressing producers of the clotting substances to settle claims before they reached the courtroom.

In the fall of 1993, top executives of three companies — Baxter, Rhone-Poulenc and Alpha Therapeutic — met with leaders of the hemophilia community to outline the terms of a $125 million offer, said Mr. Baldwin, who attended the meeting. But he said that Mr. Wadleigh and Mr. Dubin appeared anxious and insisted that any decision be put off. \”I didn\’t know what was going on,\” said Mr. Baldwin, who lives in Bedford, Tex.

He got his answer the next day: With Mr. Wadleigh as lead plaintiff, Mr. Shrager, the plaintiffs\’ lawyer, filed a class-action lawsuit on behalf of American hemophiliacs. Mr. Shrager, who had previously negotiated a favorable settlement on behalf of Canadian hemophiliacs, then established a panel of claimants, led by Mr. Wadleigh, to advise him and other lawyers.

In early 1995, the United States Court of Appeals for the Seventh Circuit in Chicago decertified the lawsuit, saying it might bankrupt the industry. Soon, the partnership between Mr. Wadleigh and Mr. Shrager unraveled in a struggle over the direction of the case.

Activists like Mr. Wadleigh and Mr. Dubin favored appealing the Seventh Circuit decision to the Supreme Court, arguing it would protect the interests of all affected hemophiliacs, not just those who had already sued. But Mr. Shrager wanted to shift gears and pursue the separate Federal proceeding that had consolidated hundreds of individual lawsuits that had been filed against the producers.

The clotting producers had quietly settled many claims, but individual lawsuits had failed because most states shield blood products from traditional product-liability claims. Still, damaging documents were emerging contending that the companies had collected blood from high-risk donors like homosexuals and prisoners. Soon, informal settlement negotiations intensified.

Meanwhile tensions between Mr. Wadleigh and others on the advisory committee and Mr. Shrager had been growing. \”It was outrageous,\” Mr. Wadleigh said. \”He said he was representing the whole community and then he\’d turn around and say that he represented the individual cases.\” Any talk of a settlement soon took a back seat to strife within the plaintiffs\’ camp.

Finally, upset by the decision of Mr. Shrager and his colleagues not to seek an appeal, Mr. Wadleigh and his allies asked a Federal judge to replace the current cast of lawyers. The closed-door drama played out last June in the chambers of Federal District Judge John F. Grady in Chicago, according to sealed court records. Mr. Wadleigh and Mr. Dubin accused the lawyer of selling out hemophiliacs as a group to advance the cause of his clients. Mr. Shrager denied the allegation and argued that it was important for the individual cases to go forward to keep up pressure on the companies to settle.

Judge Grady backed Mr. Shrager, describing the revolt by the dissidents as akin to \”passengers coming up and asking to take over the controls of a DC-10,\” according to court papers. But by that time, the activists, backed by two other plaintiffs\’ lawyers, Thomas Mull and Charles Kozak, were pushing ahead on a separate course.

In November, they found a new rallying cry when the companies they were suing announced a settlement for Japanese hemophiliacs that dwarfed the numbers being discussed in this country: $420,000 for each victim, with $235,000 coming from industry and the rest from the Japanese government.

The next month, Mr. Dubin and his lawyers began their secret talks with the companies. And by March, they came close to reaching a deal with Baxter that might have set the framework for a more lucrative deal than the one now on the table, according to company documents.

The documents show that in late March, Baxter considered offering $50,000 to any plaintiff who alleged H.I.V. infection from using a company product. Even though Baxter held only 20 percent of the market, the number of hemophiliacs who qualified for that plan might have been significantly higher because users could easily switch from one company\’s brand to another\’s. If 50 percent of 6,000 affected hemophiliacs or family members applied for the plan, a separate settlement would have cost the company $150 million, not including lawyers\’ fees.

That compares with Baxter\’s one-fifth share of the current proposal for paying each participating hemophiliac $100,000 — up to a cost to the company of $120 million, excluding legal fees. Mary Thomas, a Baxter spokeswoman, said the company, which favored an industrywide solution, had projected that the stillborn proposal would have cost it less than its current share of the industrywide offer. But she declined to disclose the basis for that estimate.

Along with talks to settle claims by those with cases that have not been filed, talks were also apparently under way earlier this year to settle lawsuits. Bayer, the largest company involved in the litigation with 45 percent of the market, pressed plaintiffs\’ lawyers involved in individual lawsuits to reach settlements quickly, according to a lawyer familiar with Bayer\’s negotiating stance. Margo Barnes, a Bayer spokeswoman, denied that the company had tried to push for settlement, adding that it had rejected entreaties from plaintiffs\’ lawyers.

For now, Mr. Dubin, Mr. Shrager and Mr. Baldwin have shed their differences and are taking a united stand toward the industry\’s settlement proposal. But the solidarity could be threatened by potential frictions between the some 500 people who have filed individual lawsuits and the thousands who would only benefit from a mass settlement. Mr. Dubin exalts about the activists\’ role in exacting favorable terms for the hemophiliac community. \”This is the first time that plaintiffs have taken a case into their own hands,\” he said.

Mr. Shrager, though, says it was really hard-knuckled lawyering that brought the companies around. \”Corey has done a great job of applying pressure in recent months,\” he said. \”But giant companies don\’t offer to give away $640 million out of the kindness of their hearts.\”

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Title: Judge OKs $640 Million Pact For HIV-Infected Hemophiliacs
By: Donna Shaw
Date: August 15, 1996
Source: The Philadelphia Inquirer