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Merck Shares Rise on Vioxx Settlement

By LINDA A. JOHNSON,

Posted: 2007-11-09 16:02:38

TRENTON, New Jersey (Nov. 9) - Merck & Co. said Friday it will pay $4.85 billion to end thousands of lawsuits over its painkiller Vioxx in what is believed to be the largest drug settlement ever.

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Merck faced personal injury lawsuits representing 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. The agreement covers cases filed in both federal and state courts.

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," Chris Seeger, one of the six plaintiff lawyers who helped negotiate the settlement, said Friday. "It's a tremendous way to resolve this litigation."

Merck pulled Vioxx from the market Sept. 30, 2004 after its researchers determined the then-blockbuster painkiller doubled risk of heart attacks and strokes.

To qualify for a settlement, plaintiffs must have filed claims by Thursday and meet several criteria, including medical proof that they suffered a heart attack or stroke, that they received at least 30 Vioxx pills and that they received enough pills to support a presumption that they were ingested 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.

Those claims were dismissed by independent scientists and plaintiffs lawyers.

Merck stressed that the agreement is not a class action settlement and that it is not admitting fault.

Company executives and attorneys said as recently as last month that every case would be fought individually.

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, as Merck shares jumped 3 percent, or $1.63 to $56.40 in pre-market trading.

Analysts predicted early on that liability could reach $50 billion (34.09 billion), but after losing its first case in a $253 million (172.51 million) verdict, Merck has won a string of civil cases.

Merck may now have put the uncertainty of millions of dollars in legal costs behind it, though it has been fairly successful fighting cases individually, winning 10 of 15 court verdicts to date.

The company said last month it had added $70 million (47.73 million) to its reserves for defending lawsuits. As of Sept. 30, Merck had reserved a total of $1.92 billion (1.31 billion) for legal expenses and spent a total of $1.2 billion (820 million).

The deal becomes binding only if 85 percent of the plaintiffs in about 26,600 lawsuits agree to drop their cases. It was finalized in the early morning hours after attorneys for Merck and the plaintiffs met with three of the four judges overseeing nearly all Vioxx claims.

Seeger said the deal was put in motion last December when three key judges pushed the parties to open out-of-court talks.

"Every claimant is going to be compensated" once their claim is validated, he said.

Seeger believes it is the largest settlement ever in the industry and said he will recommend that his 2,000 clients accept the deal.

Payments would vary, depending on severity of injuries and the length of time that Vioxx was used.

"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," Richard T. Clark, chairman, president and chief executive officer of Merck, said in a statement.

Attorneys for both sides were to present the deal Friday morning to U.S. District Judge Eldon E. Fallon in New Orleans.

"In light of significant costs and delay that would result in protracted litigation, the settlement program will ensure that those who suffered injuries as a result of Vioxx are compensated fairly and efficiently," according to a statement from one of the lead plaintiffs law firms in the case, Beasley, Allen, Crow, Methvin, Portis & Miles of Montgomery, Alabama.

Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. All active hyperlinks have been inserted by AOL.

2007-11-09 06:07:49

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195 comments

samitluci 11:53:14 AM Nov 11 2007

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I took Vioxx .25MG on 4/25/03 and on May 23, 2003 I had a Mini Stroke and another SMini Stroke on 5/26/03 and also it cause me Bursitis and I am lim on my left hip, I ended up limping and cannot bend down and cannot do my work like I used to and I was a very active person before Vioxx.
L.M. Italia - Omaha, NE.

jeffspalmerpga 12:24:00 AM Nov 10 2007

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and people wonder why meds cost so much. First they spend billions to develop, then they RISK not getting it approved, then there are inherent risks that some idiot jury and judge that figure if a male age 50, severely obese, history of two heart attacks, smokes, drinks, takes vioxx, dies, then obviously it was the Vioxx. yes quite a few of these cases are that ridiculous. I believe that those responsible for having a drug pulled should be sued by those who could have benefitted from the drug. This is like suing the car maker because the drunk drove it. There is always a risk, I think .00035% is pretty good. Aspirin, cough medicine, hell peanuts cause a LOT more than deaths than vioxx ever came close to. but the Pharma Co. have the money, and everyone wants an easy way in life. God forbid people work anymore. Im sure most of you would like the idea of risking billions on an investment, knowing there is more than a 50% chance it won't pay off, and accept a 5% return on your mon

rnor4u 11:11:36 PM Nov 09 2007

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I fell and had a severe knee injury and developed osteoarthritis very quickly and had to have a total knee replacement at age 38.............I was in pain so severe every day I would cry and I couldn't do the things I wanted to do with my two very active boys. I took vioxx from the beginning on maximum daily dose till it was taken off the market and I never had any problems............and I have high blood pressure and a high heart rate.................it was a miracle drug for me........it gave me my life back. I have taken celebrex at maximum dose since then and it works great too and gives me no problems. If I had to choose between what I was like before and what I am like now.........I choose now and I choose any risks that go with it.................decisions I have made with my family and my awsome orthopedic surgeon.

Dutchalso6 11:02:58 PM Nov 09 2007

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There are many who did not join in the class action suite and are suing on their own.

batwife62 10:30:32 PM Nov 09 2007

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Vioxx caused me to have a bleeding ulcer, which almost killed me. (I almost bled out) Personally, I don't want any $, I just want the drug companies to do better testing on their products. Aren't they supposed to help us?

toyman6000 10:25:05 PM Nov 09 2007

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all adds up to another stinking company getting off cheap

pudgie789 10:14:48 PM Nov 09 2007

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What are the deadly symptoms of the med Vioxx , please.

chstmd 09:57:39 PM Nov 09 2007

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Sicko is partly a farce. Anyone that knows how the medical system works in Cuba and England know Moore presented only one side of the coin. I know a doctor in Cuba who works in a small town who could not get any asthma medicine and I had to send her some from the US. Also in England if you are over 65 and you want dialysis for example you pay for it as the system will not. Remember there ae two sides to every story

penndragonstudio 09:56:57 PM Nov 09 2007

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jetman1979 09:24:01 PM Nov 09 2007
You all need to see the coruption of our medical system rent the movie sicko.
_____________________________________

I live and fight the corruption of our medical system...most of it is created by illegal immigrants, and the democrats supporting them.

www.simpletownusa.com

penndragonstudio 09:55:11 PM Nov 09 2007

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I was part of the original 10 people suing and Beasley Allen dropped me because I didn't want enough money...I just wanted the debt created by the heart condition I was subjected to because I took Vioxx, (it started within the first 30 days off being on it, btw) paid off...I wasn't looking for damages beyond that.

because I don't believe in being greedy...and I knew there were other people going through the same crap.

www.simpletownusa.com

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195 comments