Broad fen-phen campaign critical to class-action suit

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A $10 million ad campaign breaks this week that could influence whether a $3.75 billion class-action suit against American Home Products continues.

The campaign, financed by AHP and overseen by it and the plaintiff's lawyers in the class action, targets users of a potentially dangerous drug cocktail called fen-phen, made from the combination of Redux or Pondimin and phentermine. The effort seeks to inform some of the 6 million fen-phen users about the suit, encouraging them to opt in.

The reason: People who pass on the settlement reached in the suit can sue AHP individually, something the drug company wants to avoid. Last month, a Mississippi jury awarded $150 million to five who took fen-phen and claimed they suffered heart problems.

STAKES ARE HIGH

Both AHP and plaintiffs' lawyers have a lot riding on the outcome of the effort from Tierney & Partners, Philadelphia. Should the settlement effort fail, it could dash AHP's proposed merger with Warner-Lambert Co. -- already fragile due to a rival hostile bid from Pfizer. The success of the proposed settlement could also prevent AHP's stock price from a further battering.

The settlement is a good deal for AHP, analysts believe, because W-L agreed to the proposed merger with full knowledge of it.

"I don't think Warner-Lambert would enter into something if there is an unbelievable amount of risk," said Beth Cariello, an analyst with Deutsche Bank/Alex Brown.

The ad campaign targets women 25 to 54, the most common users of the drugs. It is scheduled to run through the end of March.

The estimated $5 million TV effort includes broadcast and cable. The $2.6 million national print component includes McCall's and Redbook, as well as People and Time. Internet banner ads will run on women's health and family targeted sites. Newspaper ads began last month. In addition, $93,000 has been set aside for Hispanic media.

PUBLIC SERVICE

The 30-second TV spot features shots of dozens of the white Redux and the red Pondimin pills while a narrator urges people who've taken the drugs to act promptly by calling a toll-free number or go to the Web site (www.settlementdietdrugs.com) for information.

"We wanted to capture a public service feeling and create a balance between urgency and reassurance," said Ed Mahlman, exec VP-director of client services at Tierney.

Of the 6 million Redux and Pondimin users, between 250,000 and 500,000 have been identified so far, said Michael Fishbein, lead plaintiffs' attorney in the case. Between 10,000 and 20,000 have taken legal action.

Victor Schwartz, an attorney uninvolved with the case, said even the glitziest effort might fail to convince people not to pursue action against AHP on their own.

"You can use Michael Jordan and Cher, but it will not override the advice given by individual lawyers," he said.

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