Merck reaches agreement to resolve U.S. Vioxx product liability lawsuits

If certain conditions are met, Merck will pay a fixed amount of $4.85 billion into a settlement fund for qualifying claims.

Merck & Co. has entered into an agreement to resolve state and federal myocardial infarction and ischemic stroke claims relating to Vioxx product liability filed in the United States.

If certain conditions under the agreement are met, Merck will pay a fixed amount of $4.85 billion into a settlement fund for qualifying claims that enter into the resolution process, according to a press release from Merck.

"This is not a class-action settlement. Claims will be evaluated on an individual basis," Merck officials stated in the release.

Merck reached the agreement with the law firms that comprise the executive committee of the Plaintiffs' Steering Committee of the federal multidistrict Vioxx (rofecoxib) litigation, as well as representatives of plaintiffs' counsel in state coordinated proceedings.

The agreement also applies to tolled claims and was signed by both parties on Nov. 9 after they met with three of the four judges overseeing the coordination of more than 95% of the current claims in the Vioxx litigation, according to the release.

"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," said Richard T. Clark, chairman, president and CEO of Merck, in the release.

Creating separate funds

Under the agreement, separate funds will be created, with $4 billion allocated for myocardial infarction claims and $850 million for ischemic stroke claims.

"While at this time the exact number of claimants covered by this agreement is unknown, the total dollar amount is fixed. Payments to individual qualifying claimants could begin as early as August 2008 and then will be paid over a period of time. Merck retains its right to terminate this process without any payment to any claimant, and to defend each claim individually at trial if any of the participation conditions in the agreement are not met," the release said.

Bruce N. Kuhlik, senior vice president and general counsel of Merck, added: "This agreement is the product of our defense strategy in the United States during the past 3 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.

"This agreement also makes sense for [Merck] because, since 2004, we have reserved approximately $1.9 billion for defending Vioxx litigation and, absent this agreement, could anticipate that the litigation might stretch on for years," he said in the release.

A focus on individual claims

Creating a process to look at individual claims is the fairest way to efficiently and quickly provide payment to qualified claimants, noted 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 3 years," he said.

"A fair resolution is in everybody's best interest. This agreement would only apply to claims already filed or tolled."

Merck voluntarily withdrew Vioxx from the marketplace on Sept. 30, 2004.

Forty-two states, Puerto Rico and the District of Columbia have statutes of limitations of 3 years or less. New Jersey Superior Court Judge Carol Higbee and Federal District Court Judge Eldon Fallon have already issued orders in cases in New Jersey and eight other jurisdictions, ruling that the statutory period for making Vioxx personal injury claims has passed.

Merck will continue to defend all claims that are not included in the resolution process.

Status of litigation

Juries have now decided in favor of Merck 12 times and in plaintiffs' favor five times. One Merck verdict was set aside by the court and has not been retried. Another Merck verdict was set aside and retried, leading to one of the five plaintiff verdicts. There have been two unresolved mistrials.

As of Oct. 9, Merck had either been served or was aware that it had been named as a defendant in approximately 26,600 lawsuits filed up to Sept. 30, which include approximately 47,000 plaintiff groups alleging personal injuries resulting from the use of Vioxx, and in approximately 264 putative class actions alleging personal injuries and/or economic loss.

Merck has also entered into a tolling agreement with the multidistrict litigation Plaintiffs' Steering Committee that establishes a procedure to halt the running of the statute of limitations for certain categories of claims allegedly arising from the use of Vioxx by non-New Jersey citizens.

The tolling agreement requires any tolled claims to be filed in federal court. As of Sept. 30, approximately 14,100 claimants had entered into tolling agreements. The parties agreed that the deadline for filing tolling agreements was April 9, and no additional tolling agreements are being accepted.

The claims of more than 5,550 plaintiff groups had been dismissed by the end of September. In addition, approximately 20 cases scheduled for trial were either dismissed or withdrawn from the trial calendar by plaintiffs before a jury could be selected, according to the press release.