U, NIH officials resume settlement talks on lawsuit

Andrew Tellijohn

Federal government and University officials resumed settlement talks last week over the long-standing National Institutes of Health lawsuit.
The suit, filed in January 1997, stems from the University’s admitted mismanagement of grant money for an anti-rejection drug called ALG.
Prospects of a settlement, dim since talks originally broke off last winter, increased last month after U.S. District Judge Richard Kyle refused to dismiss the government’s claims against the University.
“Talks have resumed in a confidential and private sort of way,” said head University Attorney Mark Rotenberg. Last Wednesday, Rotenberg flew back from Washington D.C. where the negotiations occurred.
The talks were initiated by the University, Rotenberg said. Justice department spokesman Joe Krovisky declined to comment Monday.
But David Lillehaug, a U.S. attorney in Minneapolis, confirmed that talks have resumed.
He declined comment on specifics of the case but said he hopes the two sides can find common ground soon.
“I would very much like to see this matter settled,” he said. “A settlement would be good for Minnesota and good for the federal government.
“I have encouraged people both in Minnesota and Washington to take another pass at this.”
In a separate ruling this summer, Kyle reduced the value of the suit. But there are varying opinions as to how much the suit is worth: University officials put the damages in the $20 million range; government estimates have been closer to $60 million.
Federal officials declined this week to comment on what they were seeking in a settlement.
When the government filed suit against the University last January it originally asked for more than $100 million.
Their claim, filed in conjunction with a University whistleblower, states that the school illegally sold the unlicensed organ transplant anti-rejection drug and mismanaged research grants between 1968 and 1993, accruing more than $80 million in sales. The government also sued the head of the ALG research program, Dr. John Najarian in 1995. He was acquitted of all charges.
The University has maintained they reported the violations when they learned of them.
“We’re trying to create an environment where people will think seriously about resolving this case without a lengthy trial,” Rotenberg said. “It takes two to tango; you can’t dance by yourself.”