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Wednesday, March 19, 2003 Page: 1C
Feds seek tobacco profits
The nation’s tobacco companies should forfeit $289 billion in profits for a
scheme to deceive and defraud smokers and the general public, the Justice
Department says in court filings.
In more than 1,400 pages filed in U.S. District Court as part of the
government’s 1999 lawsuit against the tobacco industry, the Justice Department
estimated 440,000 Americans die each year from smoking cigarettes or exposure
to secondhand smoke.
The government accused companies of lying about a link between cigarettes
and cancer, denying that smoking was addictive and continuing to target
teenagers.
Bill Ohlemeyer, vice president and associate general counsel for Philip
Morris USA, called the claims absurd and noted the government regulates
cigarette sales.
The trial is scheduled to begin in September 2004, but Ohlemeyer said the
company will ask the judge to dismiss the case.
Bayer cleared in lawsuit
A jury in Corpus Christi, Texas, on Tuesday cleared Bayer Corp. of
liability in a $560 million lawsuit that accused the company of ignoring
research linking cholesterol-lowering drug Baycol to dozens of deaths.
The jury deliberated for 2 days before returning the verdict. It was the
first trial of about 8,000 cases against Bayer.
“The verdict validates Bayer’s assertion that the company acted
responsibly,” Bayer said in a statement.
The lawsuit was brought by Hollis Haltom, an 82-year-old engineer who said
a muscle-wasting disease caused by Baycol severely weakened his legs. His
lawyers had produced e-mails and internal documents to argue that Bayer didn’t
adequately warn doctors about possible side effects of the drug.
Bayer, the Pittsburgh-based U.S. subsidiary of German pharmaceutical giant
Bayer AG, acknowledged the link between the drug and a side effect called
rhabdomyolysis – a rare but life-threatening condition in which muscle cells
are destroyed.
The Food and Drug Administration linked Baycol to at least 52 deaths
worldwide, including 31 in the United States.
Ex-Rite Aid boss settles
The former president and chief operating officer of Rite Aid Corp. has
agreed to contribute company stock into a settlement fund for shareholders who
bought stock in the late 1990s at inflated prices.
Timothy J. Noonan will contribute stock worth $130,000 into the fund.
Meanwhile, lawyers representing a class of shareholders who bought the drug
retailer’s stock from May 1997 to November 1999 also plan to drop claims
against former chief financial officer Frank Bergonzi to allow the settlement
to proceed.
Lawyers also are negotiating with Martin L. Grass, Rite Aid’s former
chairman and chief executive officer, over his contribution to the settlement.
Rite Aid previously agreed to provide $193 million into the settlement fund
and KPMG LLP, Rite Aid’s former auditor, said it would provide $125 million.
With the KPMG and Noonan contributions, the settlement package is worth
more than $318.1 million to shareholders who bought stock when, prosecutors
say, former management manipulated earnings.
More food safety sought
Food could be vulnerable to tampering by terrorists because processors
don’t have to share their security plans with federal regulators,
congressional auditors said.
The report by the General Accounting Office was released Tuesday as the
Agriculture Department told farmers and the food industry to increase security
because of a heightened terror alert.
Under current guidelines, food companies are asked to volunteer security
details with the Agriculture Department and Food and Drug Administration.
Both agencies should consider asking Congress to require that manufacturers
share detailed security plans with them, said the GAO.
Garry L. McKee, administrator of food safety at USDA, said the agency
generally agreed with the report. FDA officials said they already have the
tools to make certain plants can prevent food tampering.