Merck Agrees to Pay $4.85 Billion in Vioxx Claims

Three years after withdrawing its pain medication Vioxx from the market, Merck announced today that it will pay $4.85 billion to settle 27,000 lawsuits by people who contend they or their family members suffered injury or died after taking the drug.

The settlement, one of the largest ever in civil litigation, comes after nearly 20 Vioxx civil trials over the last two years from New Jersey to California. After losing a $253 million verdict in the first case, Merck has won most of the rest of the cases that reached juries, giving plaintiffs little choice but to settle.

The settlement will help put Vioxx behind Merck, as well as sharply reduce its Vioxx-related legal defense fees, which are now running at more than $600 million annually.

Judges in Louisiana, New Jersey and California, who oversee nearly all the lawsuits, had pressed for a deal before a new wave of trials was scheduled to begin in January.

Plaintiffs will receive different settlement payments depending on the severity of their injuries and the length of time they took Vioxx. The deal becomes binding only if 85 percent of all plaintiffs agree to drop their cases and take the deal.

Based on the fact that the 27,000 suits cover about 47,000 sets of plaintiffs, the average plaintiff will receive just more than $100,000 before legal fees and expenses, which usually swallow 30 percent to 50 percent of payments to plaintiffs. Plaintiffs who do not want to accept the settlement can pursue their own claims, but with so many of the top trial lawyers in the United States agreeing to the deal, they may have difficulty doing so.

Vioxx may trigger heart attacks within days

The controversial painkiller Vioxx (rofecoxib) may cause heart attacks within just two weeks of starting the drug treatment, a study of Canadian patients claims.

The finding could influence the outcome of the many thousands of lawsuits filed against Vioxx manufacturer Merck, because it suggests that the once-popular arthritis drug could have contributed to a heart attack or stroke even among patients who took it for very brief periods.

Vioxx was pulled from the market in 2004 after a large clinical trial showed that taking the drug for 18 months nearly doubles the risk of heart attack and stroke1. There has been intense medical and legal debate about whether these problems actually kick in much earlier.

Linda Lévesque of McGill University in Montreal, Canada, and her colleagues tackled this question by scouring the computerized health records of 125,000 Quebec residents aged 66 or older. They identified people who had taken Vioxx and the related drug Celebrex (celecoxib), and examined the frequency and time at which these people suffered heart attacks.

Jury: Merck was negligent

Merck has been held liable by a Texas jury in the first lawsuit involving its former blockbuster drug Vioxx, in a case that could have a profound effect on thousands of other cases filed against the company.

Plaintiff Carol Ernst has won her lawsuit in Texas Superior Court in Angleton, which blames Vioxx for the 2001 death of her husband, Robert Ernst, a 59-year-old marathon runner and Wal-Mart worker who was taking the arthritis painkiller at the time of his death. Ernst died of a heart attack.

The verdict held Merck liable for the death. Jurors voted 10-2 in favor of Ernst.

The jury awarded more than $250 million in total damages — $24 million to Carol Ernst for mental anguish and loss of companionship, and $229 million in punitive damages. Ernst’s Houston-based lawyer, Mark Lanier, said the punitive-damages figure was based on “the money Merck made and saved by putting off their product label changes.”

Lanier had been seeking $40.4 million in damages, and after the verdict, Lanier said that he expected the punitive-damages award to be reduced according to Texas law.

“Justice is a beautiful thing, isn’t it?” Lanier told reporters following the verdict.

Merck said it would appeal the decision. “We believe that the plaintiff did not meet the standard set by Texas law to prove Vioxx caused Mr. Ernst’s death,” said Jonathan Skidmore, a member of Merck’s legal defense team, according to a statement released by Merck.

First Vioxx lawsuit in Texas has huge implications for Merck

There is a lot at stake for Merck in the Vioxx lawsuits.

The first Vioxx trial is set to start in Texas. Analyst says Merck’s liability could hit $25 billion.

One Wall Street analyst, Chris Shibutani at J.P. Morgan Securities, estimated that Merck’s liabilities from Vioxx range from $8 billion to $25 billion, far higher than the $4 billion to $18 billion estimated by Merrill Lynch analyst David Risinger in November. Shibutani rates the company “neutral.”

“The first case has a lot of impact on what comes afterward,” Chip Babcock, a partner at Houston law firm Jackson Walker LLP, told Reuters. Babcock said the lawsuit could influence impending litigation in state courts in New Jersey, California and Texas, as well as the U.S. federal court in New Orleans, the news agency reported.

Merck pulled Vioxx, a $2.5 billion arthritis painkiller, off the market on Sept. 30, 2004, in response to concerns the medication could cause heart attacks and stroke. The company, however, has never conceded there were risks. Since the recall, more than 2,300 lawsuits have been filed against the Whitehouse Station, N.J.-based company by more than 4,600 plaintiffs. Jury selection got underway Monday in the first civil trial at Texas Superior Court before Judge Ben Hardin.

Carol Ernst has sued Merck in the Angleton, Texas court and blames the company for the 2001 death of her husband, a Vioxx patient. Her lawyer, W. Mark Lanier of Houston, said that Vioxx caused the fatal cardiac arrhythmia of Robert Ernst and that Merck suppressed information about the dangers of the drug.

“I believe they took the three monkey approach,” said Lanier on Friday. “They covered their eyes because they didn’t want to see anything that would hurt the sale of Vioxx, they covered their ears because they didn’t want to hear anything that would hurt the sale of Vioxx, and they covered their mouth because they certainly didn’t want to say anything that would hurt the sale of Vioxx.”

Merck has consistently denied charges that Vioxx caused deaths, on the grounds that these charges have never been proven. Merck has also denied allegations that it concealed information, noting that the company voluntarily withdrew Vioxx from the market.

Evidence in Vioxx Suits Shows Intervention by Merck Officials

In 2000, amid rising concerns that its painkiller Vioxx posed heart risks, Merck overruled one of its own scientists after he suggested that a patient in a clinical trial had probably died of a heart attack.

In an e-mail exchange about Vioxx, the company’s most important new drug at the time, a senior Merck scientist repeatedly urged the researcher to change his views about the death “so that we don’t raise concerns.” In later reports to the Food and Drug Administration and in a paper published in 2003, Merck listed the cause of death as “unknown” for the patient, a 73-year-old woman.

The discussion of the death is contained in several previously undisclosed Merck records, including e-mail messages from Dr. Edward M. Scolnick, Merck’s top scientist from 1985 until 2002, and from Dr. Alise S. Reicin, a vice president for clinical research, that indicate Merck’s concerns about data contradicting its view that Vioxx was safe.

In one e-mail message, Dr. Scolnick said the drug trial that included the woman’s death had “put us in a terrible situation.” In others, he fiercely criticized the F.D.A. and said he would personally pressure senior officials at the agency if it took action unfavorable to Vioxx.

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