Merck Strikes Vioxx Settlement

Merck has agreed to make a $4.85 billion settlement fund to end a vast number of Vioxx lawsuits from U.S. patients. The company stressed that this does not constitute a class-action settlement, but that the fund will cover qualified claims on a case-by-case basis.

Merck will set aside $4 billion for myocardial infarction (MI) claims and $850 million for ischemic stroke claims. The fund “is a fixed amount to be allocated among qualifying claimants based on their individual evaluation,” according to a company statement. The settlement requires enrollment of at least 85% of qualifying plaintiffs. The company says ot will continue to defend all claims that are not included in the resolution process. The company has spent $600 million in each of the past two years on legal costs related to Vioxx cases, so the fixed cost of this

“This is a good and responsible agreement that will allow the company to concentrate even more fully on its mission of discovering, developing and delivering novel medicines and vaccines,” said Richard T. Clark, chairman, president and chief executive officer of Merck. “The agreement is structured to provide a significant degree of certainty toward resolving the majority of the outstanding Vioxx product liability claims in the United States for a fixed amount.”

Quoting Merck’s announcement, terms of the agreement include:

• To qualify, claimants will have to pass three gates: an injury gate requiring objective, medical proof of MI or ischemic stroke (as defined in the agreement), a duration gate based on documented receipt of at least 30 VIOXX pills, and a proximity gate requiring receipt of pills in sufficient number and proximity to the event to support a presumption of ingestion of VIOXX within 14 days before the claimed injury;
• Individual cases will be examined by administrators of the resolution process to determine qualification based on objective, documented facts provided by claimants, including records sufficient for a scientific evaluation of independent risk factors;
• The agreement provides that Merck does not admit causation or fault;
• Neither stroke claims that are hemorrhagic in nature nor transient ischemic attacks will qualify;
• Law firms on the federal and state Plaintiffs’ Steering Committees and firms that have tried cases in the coordinated proceedings must recommend enrollment in the program to 100 percent of their clients who allege either MI or ischemic stroke;
• The parties agree to seek court orders from the four coordination judges requiring plaintiffs’ attorneys to promptly register all of their VIOXX claims, whether filed or tolled, and to identify the alleged injury – in order to establish the universe of all existing claims in the United States;
• Participation conditions: payment obligations under the agreement will be triggered only if, by March 1, 2008 (subject to extension by Merck), plaintiffs enroll in the settlement process: (a) 85 percent or more of all currently pending and tolled MI claims, (b) 85 percent or more of all currently pending and tolled ischemic stroke claims; (c) 85 percent or more of all eligible claims involving a death; and (d) 85 percent or more of all eligible claims alleging more than 12 months of use; and
• This agreement applies only to U.S. legal residents and those who allege that their MI or ischemic stroke occurred in the United States.

“This agreement is the product of our defense strategy in the United States during the past three years and is consistent with our commitment to defend each claim individually through rigorous scientific scrutiny.  Under the agreement, there will be an orderly, documented and objective process to examine individual claims to determine if they qualify for payment,” said Bruce N. Kuhlik, senior vice president and general counsel of Merck.

“Creating a process to look at individual claims is the fairest way to efficiently and quickly provide payment to qualified claimants,” said Russ Herman, liaison counsel in the federal multidistrict Vioxx litigation and chair of the Plaintiffs’ Negotiating Committee. “Specific causation has been a very difficult issue.  This is an opportunity to end a long and difficult litigation that has stretched on for more than three years.  A fair resolution is in everybody’s best interest.  This agreement would only apply to claims already filed or tolled.”