Las Vegas Hepatitis C Outbreak Cases Get Settlements

By KEN RITTER | February 24, 2012

Court-ordered talks have yielded settlements in 41 lawsuits involving drug companies blamed for supplying an anesthetic to Las Vegas medical clinics where health officials say patients contracted incurable hepatitis C through unsafe injection practices including the reuse of large vials, officials said Tuesday.

Clark County District Court Judge Jennifer Togliatti approved settlements involving Teva Parenteral Medicines Inc. and other companies after nine days of negotiations spurred by a Nevada Supreme Court order. The state high court had dubbed the talks a “global settlement conference.”

Terms of the settlements weren’t immediately made public. Denise Bradley, a spokeswoman for Teva, said the Israel-based company had set aside about $285 million to pay its share of the bill.

“Teva is pleased to have put the vast majority of these matters behind us,” Bradley said, adding that the company has 15 more cases pending.

A court spokeswoman, Mary Ann Price, called the settlement one of the largest in Nevada history and predicted it would save millions of dollars in court time, juror effort and “heartache” for victims. “This resolution averts potential years of litigation” and possible appeals, Price said in an email.

Plaintiffs’ lawyers didn’t immediately respond to messages seeking comment.

Cases included in the settlement include a Teva and Baxter Healthcare Corp. appeal pending before the Nevada Supreme Court. That case resulted in a $500 million jury award in May 2010 to a Las Vegas private school headmaster who became infected with hepatitis C, and his wife.

A separate jury awarded other plaintiffs $182.6 million in a case in which pharmaceutical distributor McKesson Corp. was also found liable. A third jury awarded $104 million in damages to plaintiffs in yet another product liability lawsuit stemming from a hepatitis C outbreak.

Baxter and McKesson officials didn’t respond to messages Tuesday.

In each of the three trials, plaintiffs’ lawyers alleged the drug companies chose profits over patient safety by delivering large vials of the powerful anesthetic propofol to outpatient endoscopy clinics owned by Dr. Dipak Desai.

Desai was once a prominent gastroenterologist and Nevada State Board of Medical Examiners member. He and two former clinic employees have pleaded not guilty to state racketeering, insurance fraud and neglect of patients’ charges that could put them in prison for the rest of their lives. Desai is free on $1 million bond with trial slated to start next month.

His clinics – Desert Shadow Endoscopy Center, Endoscopy Center of Southern Nevada and Gastroenterology Center of Nevada – filed for Chapter 7 bankruptcy liquidation in July 2009.

Desai and his former chief clinic business executive also face federal fraud charges alleging they overbilled health insurance companies. His lawyers are trying to prove he is physically and mentally incapacitated unfit for trial due to strokes and heart ailments.

Desai wasn’t a defendant in the three civil trials during which juries agreed the companies induced clinic doctors and nurse anesthetists to reuse the large vials during successive anesthesia procedures – despite the danger of spreading blood-borne illnesses from one patient to the next.

The companies maintained they shouldn’t be blamed for the hepatitis outbreak – that the drug was properly manufactured and delivered, and that clinic owners and employees were more to blame for the spread of infection through unsafe practices and procedures.

Southern Nevada Health District officials began notifying more than 50,000 Desai patients in February 2008 to get tested for hepatitis and HIV. Authorities later determined that nine people contracted hepatitis C through unsafe clinic practices at Desai’s Endoscopy Center of Southern Nevada and Desert Shadow Endoscopy Center.

Officials said cases involving another 105 patients might have been related.

The outbreak spawned dozens of lawsuits in state court, including the 41 that the state high court ordered into settlement talks.

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