When I run your code as follows:

#!/usr/local/bin/perl -w

use strict;

my $item    = {};

$item->{'description'}  = qq{<font size=2><b><a target="_blank" href="
+http://us.rd.yahoo.com/dailynews/rss/topstories/*http://story.news.ya
+hoo.com/news?tmpl=story2&u=/latimests/20050210/ts_latimes/drugbenefit
+scostestimatessoarsurprise">Drug Benefit's Cost Estimates Soar, Surpr
+ise (Los Angeles Times)</a></b></font><br /><font size=1></font><br /
+>};

$item->{'description'}  =~ s/'//gms;

print $item->{'description'};

---OUTPUT---
<font size=2><b><a target="_blank" href="http://us.rd.yahoo.com/dailyn
+ews/rss/topstories/*http://story.news.yahoo.com/news?tmpl=story2&u=/l
+atimests/20050210/ts_latimes/drugbenefitscostestimatessoarsurprise">D
+rug Benefits Cost Estimates Soar, Surprise (Los Angeles Times)</a></b
+></font><br /><font size=1></font><br />
[download]

In what instance is it not working? Ps - even though there was only one single quote in your data, this code will also work without a problem with multiple single quotes due to the /g;