Merck to Ante Up $4.85B for Vioxx SettlementsPharmaceutical giant Merck will pay $4.85 billion to end thousands of lawsuits over its painkiller Vioxx. The amount, to be paid into a settlement fund, is believed to be the largest drug settlement ever. Claims must meet certain criteria to qualify for payment as the settlement is not a class action.
Merck & Co. set up a $4.85 billion settlement fund to pay plaintiffs who can prove that they suffered a heart attack or stroke as a result of the drug Vioxx. Read the conditions in the agreement which is only open to those cases filed or tolled on or before Nov. 8, 2007.
Pharmaceutical giant Merck & Co. said Friday that it will pay $4.85 billion to end thousands of lawsuits over its painkiller Vioxx.
The amount, to be paid into a so-called settlement fund, is believed to be the largest drug settlement ever.
Claims must meet certain criteria to qualify for payment as the settlement is not a class action.
The Whitehouse Station, N.J.-based drug maker emphasized that it is not admitting fault.
The settlement lets Merck avoid the personal-injury lawsuits of some 47,000 plaintiffs, and about 265 potential class-action cases filed by people or family members who claimed the drug proved fatal or injured its users.
Merck pulled Vioxx from the market Sept. 30, 2004, after its researchers determined the then-blockbuster painkiller doubled risk of heart attacks and strokes.
"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," Chairman, President and CEO Richard Clark said in a statement.
The agreement is open only to those cases filed or tolled on or before Nov. 8, 2007, according to the statement.
Negotiating teams met more than 50 times in eight states and spoke hundreds of times over the telephone to hammer out the deal, according to attorneys.
"I'm very happy with it," said Chris Seeger, one of the six plaintiff lawyers who helped negotiate the settlement. "It's a tremendous way to resolve this litigation."
Under the agreement, Merck will create separate funds: one for $4 billion for myocardial infarction claims; and another for $850 million for ischemic stroke claims.
Myocardial infarction (MI) is the damaging or death of a part of the heart muscle caused by a reduction or a complete stoppage of the blood supply to that area of the heart.
The $4.85 billion payout is a fixed amount that will be allocated after evaluation of each claimant.
"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.
The drug manufacturer doesn't know the exact number of claimants but the total dollar amount is fixed.
Payments to individual qualifying claimants could begin as early as August 2008.
Key criteria for payment include the plaintiff proving having suffered a heart attack or stroke as well as receiving enough pills to support taking them within two weeks before injury.
That is a big concession by Merck, which has long claimed that Vioxx caused harm only after 18 months of use.
Whitehouse Station, N.J.-based Merck will cover the settlement's cost by taking a $4.85 billion charge, before taxes, against fourth-quarter results.
Analyst Steve Brozak of WBB Securities called Merck's' handling of the litigation "a Harvard casebook study of how to deal with a problematic product."
Investors seemed to agree. Merck shares advanced $2.60, or 4.75 percent, to $57.37 in afternoon trade on the New York Stock Exchange.
The deal becomes binding only if 85 percent of the plaintiffs in about 26,600 lawsuits agree to drop their cases.
Vioxx was removed from the market in September 2004 after it was revealed that the drug increased the risk of heart attacks and strokes.
Joe Raedle/Getty Images
Joe Raedle/Getty Images
Merck & Co. said Friday that it will pay nearly $5 billion to end tens of thousands of lawsuits over its painkiller Vioxx. It's one of the largest settlements involving prescription drugs ever.
The company said that people and estates who have already filed lawsuits would qualify if they show proof of a heart attack or a certain type of stroke within 14 days of taking Vioxx.
Merck pulled Vioxx off the market in September 2004 after it was revealed that the drug increased the risk of heart attacks and strokes. Here, a look at what has happened since Vioxx was taken off the market.
Q: What happened to people after they stopped taking Vioxx and related drugs, called COX-2 inhibitors?
According to a large study presented this week at the American College of Rheumatology meeting in Boston, there was a sharp increase (21 percent) in the number of serious gastrointestinal complications in elderly Americans after they stopped taking COX-2 drugs for arthritis.
Q: Why did the rate of bleeding go up?
Vioxx and COX-2 inhibitors were marketed as being gentler on the stomach — and reducing the incidence of bleeding ulcers and other complications. The study showed that just after Celebrex and Vioxx were introduced, the rate of serious ulcer complications started going down in this elderly, arthritic population. That allowed doctors to stop prescribing medications to protect the stomach to people who were taking painkillers on a long-term basis. The study shows that around the time Vioxx was withdrawn from the market, the rate of GI side effects went up again.
Q: What are patients with chronic pain doing now without these drugs?
People largely have been taking non-steroidal anti-inflammatory drugs (NSAIDs). These include the generics naproxen (sold under the brand names like Aleve) and ibuprofen (Advil, Motrin). These drugs have always been associated with significant rates of GI bleeding when taken for weeks or months at a time. Doctors often prescribe a drug called a proton-pump inhibitor to protect the GI system from the damage that NSAIDs and aspirin can cause.
One COX-2 inhibitor remains on the market — low-dose (200 milligram a day) Celebrex. The Food and Drug Administration has placed warnings on the drug cautioning that life-threatening cardiovascular side effects have occurred with related drugs. Some studies have shown that Celebrex at higher doses does increase the risk of heart attacks and strokes. The drug should not be used right before or right after certain heart surgeries.
A generic drug called meloxicam is also available. It isn't a COX-2 inhibitor, but has some of the same benefits as the COX-2 inhibitors. For instance, it is not as hard on the GI system as the NSAIDs.
Q: How safe are the NSAIDS?
There is ongoing research into the cardiac effects of the NSAIDs after a study suggested that people taking naproxen might be at increased risk of a heart attack or stroke. But these studies so far have not found enough evidence of that to send out any alarms.
Q: What's the lesson from the Vioxx episode?
The withdrawal of Vioxx and Bextra from the market led to significant changes in the way drugs are regulated in the United States. The FDA was forced to reexamine how it judged drug safety and to put new procedures into place to protect the public. The episode also caused drug companies to tone down their aggressive marketing of prescription drugs. The marketing campaign for Vioxx and Celebrex came under intense criticism for creating demand for a drug among people who did not need such strong — and potentially risky — painkillers.