Merck to Settle Vioxx Lawsuits for $4.85 Billion

Nov 09, 07:52 AM

Current Headlines: By ALEX BERENSON

By Alex Berenson

The New York Times

Three years after withdrawing its pain medication Vioxx from the market, Merck has agreed to pay $4.85 billion to settle 45,000 lawsuits by people who claim they or their family members suffered injury or died after taking the drug, according to a person with direct knowledge of the matter.

The settlement, one of the largest ever in civil litigation, comes after nearly two dozen trials in states 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.

The settlement does not end the government investigations that Merck faces, which include both federal and state inquiries. But the settlement will put to rest any fears that Vioxx lawsuits might bankrupt the company, which has already spent almost $2 billion defending itself, or even have a significant financial impact.

While eye-popping, the settlement payment represents less than one year's profits for the company, the third-largest American drugmaker.

For plaintiffs, the settlement will provide a measure of vindication and financial relief. But the amount is far smaller than Wall Street analysts and lawyers predicted when Merck withdrew Vioxx, and especially after the verdict in the first case.

Merck withdrew Vioxx in September 2004, after a clinical trial proved that it increased the risks of heart attacks and strokes.

But internal company documents showed that Merck's scientists were concerned about the risks of Vioxx several years earlier.

The settlement vindicates Merck's risky decision to take cases to trial rather than agree to a quick, early settlement. By aggressively defending itself, Merck exposed the weaknesses in many plaintiffs' cases. Some plaintiffs could not prove they had taken the drug, and others had many other risk factors for heart attacks.

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