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Executive Summary

SEARLE DISCONTINUING CU-7, TATUM-T INTRAUTERINE COPPER CONTRACEPTIVES because of "mounting unjustified litigation in the U.S. that has made future product liability insurance virtually unobtainable," the firm announced in a Jan. 31 press release. Approximately 775 lawsuits have been filed against Searle since the CU-7 entered the market 12 years ago. The company noted that in recent months it has "successfully defended the CU-7 in four jury trials at a cost exceeding $1.5 mil." According to Searle, 470 of the 775 suits have been disposed of, with approximately one-third dismissed with no payment and two-thirds settled "for substantially less than it would have cost to litigate." The firm said it has been to court 10 times, and won eight of those suits. There are 305 cases still pending against Searle. Searle asserted that it has "full confidence in the safety, efficacy and medical utility of the CU-7 and the TATUM-T when used in accordance with FDA-approved prescribing information." The company said there has been "no change in the status of FDA's approval" of the two products as safe and effective, so women using either product do not need to have them removed. "The CU-7 and TATUM-T join the growing list of beneficial Rx drugs voluntarily withdrawn from the U.S. market because of unfounded litigation," Searle declared. The Monsanto/Searle decision to halt sales of the IUDs bears a striking similarity to the reaction of the other major chemical company recently acquiring a U.S. drug business. Dow withdrew Bendectin, which came with Merrell, from the market in June 1983. Dow maintained that Bendectin was no longer a commercially viable product due to insurance costs of $10 mil. per year, litigation expenses and liability exposure. The loss of Bendectin, with 1982 sales of $13 mil., was weighed by the company against the cost of continued marketing and the negative publicity that could have hurt other Merrell Dow drugs under review at FDA. The two Searle IUDs had combined 1985 sales of $11 mil. Searle has several other ob/gyn products that could be at risk from negative publicity stemming from the intrauterine contraceptives. In a "Dear Doctor" letter announcing discontinuation of the IUDs, Searle stated: "We appreciate your understanding of this decision and assure you of our continued support of obstetrics and gynecology with other Searle products such as Demulen 1/35, Demulen 1/50, Ovulen and Flagyl." The company noted in its release and Dear Doctor letter that "the Natl. Medical Cmte. of Planned Parenthood publicly reaffirmed its position that Searle's Copper IUDs are a safe and effective method of contraception." The firm said it is aware of only one other IUD left on the market, Alza's Progestasert. Robins voluntarily withdrew its Dalkon Shield from the market in June 1974 and is now in Chapter 11 proceedings stemming from product liability litigation costs. Searle said it is "looking into the possible sale of its non-U.S. IUD business." The company stated that discontinuation of the IUD's "will have no material effect on earnings" and that it believes it has "sufficient reserves and insurance to cover current IUD litigation." In addition to Dear Doctor letters, Searle is also sending notices to physician supply houses in the U.S. and said it is prepared to accept all returned inventory. In its letter to physicians, Searle noted that it is also no longer going to make in the U.S. the Mark-7 disposable intrauterine sound, a device that measures the depth of the uterus.

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