Merck Reaches $4.85B Vioxx Settlement To End Thousands of Lawsuits
An agreement announced on Friday under which Merck will pay $4.85 billion to settle about 27,000 lawsuits related to the COX-2 inhibitor Vioxx -- which the company withdrew from the market in September 2004 because of concerns about increased risk for cardiovascular events -- might not "seem like a corporate victory," but the deal will allow the company to "put one of the most troubling episodes in its history behind it" for only a "fraction of the price" estimated by analysts, the New York Times reports.
Analysts had estimated that Merck would pay as much as $25 billion to settle Vioxx lawsuits. The settlement, which represents only about nine months of profit for Merck, also will eliminate future legal costs, which likely would have increased next year with a number of new Vioxx trials scheduled to begin (Berenson, New York Times, 11/10).
The settlement will increase the total cost of Vioxx lawsuits for Merck to almost $7 billion (Stark, Philadelphia Inquirer, 11/10). Merck "still faces some 10,000 to 15,000 claimants who aren't expected to qualify for the settlement," but the company "believes these cases are weaker," the Wall Street Journal reports (Tesoriero et al., Wall Street Journal, 11/10). The settlement applies to patients who experienced a heart attack or stroke and took Vioxx for at least 14 days (Wong, Chicago Tribune, 11/10).
According to the Washington Post, the success of the decision by Merck to fight each of the Vioxx lawsuits individually initially, rather than agree to a global settlement, "could be a model not only for the pharmaceutical industry but also for companies that manufacture a wide range of products that are later deemed harmful or defective" (Johnson, Washington Post, 11/10).
Meanwhile, attorneys who represent plaintiffs in Vioxx lawsuits have raised concerns that the agreement will not provide adequate payments to their clients, the Journal reports (Efrati et al., Wall Street Journal, 11/12).
Under the agreement, Merck and a committee of plaintiff attorneys will evaluate Vioxx lawsuits that remain out of court. Merck will place the $4.85 billion in a fund, and the company and the committee will establish a procedure to review medical evidence of heart attacks and strokes experienced by patients who took Vioxx.
Plaintiffs will receive different settlements based on the length of time that patients took Vioxx and the severity of the injuries that they experienced (California Healthline, 11/9). The agreement requires approval by 85% of plaintiffs (McCoy, USA Today, 11/12).
CNBC on Friday included a discussion with Barbara Ryan, a pharmaceutical analyst at Deutsche Bank, about the agreement and the potential implications for Merck (Shactman, CNBC, 11/9). Video of the segment is available online.
In addition, NPR's "Morning Edition" on Monday reported on the effects of the Vioxx withdrawal and the agreement on the pharmaceutical industry. The segment includes comments from Catherine DeAngelis, editor-in-chief of the Journal of the American Medical Association; Steven Nissen, chair of the Department of Cardiovascular Medicine at the Cleveland Clinic; and Bruce Psaty, a professor of medicine and epidemiology at the University of Washington (Knox, "Morning Edition," NPR, 11/12). Audio of the segment is available online.