Vioxx settlement for $4.85 billion announced

By Harvey Kirk
Posted November 9, 2007

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Merck & Co. announced this morning that a Vioxx settlement was reached which could cover about 50,000 of the claims presented against the company.  According to the terms of the agreement, Merck will pay $4.85 billion into a fund for qualifying claims, which is expected to resolve the vast majority of all cases presented against the company.

According to the terms of the Vioxx settlement, $4 billion will be designated for individuals who suffered myocardial infarction (heart attacks), and the remaining $850 million will be for individuals who suffered an ischemic stroke.  Each individual claimant will make a decision about whether to accept the Vioxx offer on their claim, but the global settlement is only binding on Merck if 85% of all claimants settle.

About 27,000 Vioxx lawsuits have been filed on behalf of 47,000 sets of plainitiffs.  The cases have been going to trial one by one, as Merck has insisted on litigating every case.  Of the first 16 cases to go to trial, Merck has won 11 cases and lost 5.  However, every loss has resulted in a multi-million dollar verdict.  If the company had continued to try every case, it would have taken them years and billions of dollars in defense costs, not to count the billions they would have had to pay out to satisfy judgments awarded to those injured by the drug.

While evidence clearly establishes that Vioxx increases the risk of serious and potentially fatal cardiovascular events, many of the lawsuits tried so far have had difficulty establishing that Vioxx caused the individual plaintiff’s injury.  The settlement was reached as a new wave of Vioxx trials were scheduled to begin in January 2008.

Merck & Co. is the third largest drug manufacturer in the United States, and the settlement represents less than one year of the company’s current profits.  Vioxx was approved by the FDA for treatment of arthritis and other general pain.  Since it was placed on the market in 1999, it has been taken by about 20 million Americans and generated over $10 billion in sales.  At the time Vioxx was recalled in September 2004, annual sales were approximately $2.5 billion.

The Vioxx settlement is expected to cover about 45,000 to 50,000 claims presented by individuals who suffered heart attacks or strokes as a result of the pain medication.  Certain other claims will not be eligible for the settlement based on the injuries claimed or lack of validating proof.  On the other hand, some of the cases which have already gone to trial and resulted in multi-million dollar damage awards will not be paid out of this settlement fund, as Merck continues to appeal those awards.

Additional information regarding the Vioxx settlement will be presented to individual clients over the coming months.  It is expected to take over a year to finalize the settlements and distribute funds.