Merck to settle Canada Vioxx suits for up to C$37M

AP News
Posted: Jan 19, 2012 6:42 PM
Merck to settle Canada Vioxx suits for up to C$37M

Drugmaker Merck & Co. said Thursday that it has reached a deal to settle all lawsuits in Canada over its recalled painkiller Vioxx, for up to 36.9 million Canadian dollars ($36.5 million).

Merck and attorneys representing hundreds of Vioxx users in Canada said the final payment will be at least $21.6 million and could go as high as $36.5 million.

Merck and representatives of the plaintiffs have signed the agreement, which is awaiting approval by courts in Canada's provinces. Individual plaintiffs will get payments based on the injuries claimed, how long they took Vioxx and other factors.

Merck, based in Whitehouse Station, N.J., denied any wrongdoing.

"This is an excellent result in a very challenging case," Harvey Strosberg, one of the counsel representing Canadian Vioxx class members, said in a statement.

Merck voluntarily pulled Vioxx from the market on Sept. 30, 2004, after its own research found the popular treatment for arthritis and other types of pain doubled risk of heart attack, stroke and death.

Shareholders lost a combined $28 billion when Merck stock plunged the next day. Lawsuits quickly mounted, filed by U.S. and foreign patients claiming harm from the drug, shareholders who lost money and insurers who paid for Vioxx prescriptions. They all insisted the company had downplayed the drug's health risks until right before it withdrew Vioxx from the market.

Merck won about two-thirds of the Vioxx personal injury lawsuits that went to trial. It used that track record to obtain a $4.85 billion settlement in November 2007, ending roughly 50,000 U.S. patient lawsuits, the vast majority of such cases. Some analysts had initially estimated Merck's liability at up to $50 billion.

Last November, Merck agreed to pay $950 million to resolve government investigations into its marketing of Vioxx, including $321.6 million in criminal fines and $628.4 million in a civil settlement to be split by the federal government and state Medicaid programs. Merck agreed to plead guilty to a misdemeanor charge that it marketed Vioxx as a treatment for rheumatoid arthritis before getting Food and Drug Administration approval.

Merck also has spent tens of millions of dollars paying its defense lawyers. Most of the other litigation also has been wrapped up.

"This agreement is structured to provide certainty and finality toward resolving Vioxx cases in Canada for a fixed amount," said Bruce Kuhlik, Merck's general counsel. "Under the agreement, there will be an orderly, documented and objective process to examine individual claims to determine qualification."

The settlement covers Vioxx users, or their survivors, who suffered a heart attack or died from one. Their claims will be evaluated individually by an independent administrator according to the length of Vioxx use, the severity of injuries, the patient's age and whether they had known heart disease or risk factors such as diabetes or smoking. Claimants who suffered a stroke, or their survivors, would get awards of no more than 5,000 Canadian dollars ($4,944).

Under the terms of the tentative deal, a total of $10.4 million from the settlement would be split among the lawyers representing the plaintiffs, Canadian provinces and territories that paid for Vioxx prescriptions, and the administrator implementing the settlement process.

The rest would go to claimants, with the final number of eligible people determining the total amount Merck would pay out. If 1,500 people were determined to be eligible claimants, for example, Merck said it would pay a total of about $33 million, the company said.