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Vioxx Settlement Meets Vital Deadline

Mar 6, 2008 | Parker Waichman Alonso LLP

The Vioxx  settlement passed yet another milestone.  Enough people have signed on to Merck & Co.'s pending $4.85 billion Vioxx settlement to keep settlement activities moving forward, the drug maker announced. Vioxx, or refecoxib, is in a class of drugs called nonsteroidal anti-inflammatory drugs (NSAIDs) and works by reducing substances that cause inflammation, pain, and fever.  Vioxx was pulled from the market in 2004 after being linked to cardiovascular problems.  After a few years of litigation, a comprehensive settlement was proposed in November.  Under the settlement plan, Merck agreed to compensate plaintiffs who can show, under certain conditions, that taking the drug was connected their having suffered a heart attack or stroke.

Over 95 percent registered cases against Merck & Co. by the January 15th deadline, much more than the minimum required to proceed.  Also, parties involved in the lawsuit have agreed on some amendments that resolve one outstanding issue and make payouts more attractive to those plaintiffs who have been holding out for a better deal.  The company said over 44,000 of the 47,000 claimants who registered injuries eligible for compensation have submitted some or all of the documentation required to seek a share of the settlement.   Friday was the deadline for accepting the offer; at least 85% of eligible claimants had to enroll by submitting forms and medical authorizations in order to validate the deal.  It isn't yet clear how many of those submitting paperwork meet all the criteria.  Those who submitted partially completed enrollment packages have until March 31 to provide the rest of their materials.

Claimants are now required to provide medical records that third-party administrators will use to assess for what payment they might qualify.  Under the plan, a claim must be based on an incidence of heart attack, ischemic stroke, or sudden cardiac death.  Plaintiffs must provide documentation indicating Vioxx was taken for at least 30 days and the injury occurred within 14 days of using the drug.  Payouts will be adjusted according to other cardiovascular risk factors.

Plaintiffs lawyers estimate that, depending on age and risk factors, settlement payments will range from $50,000 to $1.5 million, with an average exceeding $200,000.  Merck set aside $1.9 billion for litigation costs—not including payouts—and spent $1.2 billion.  Plaintiffs had trouble persuading juries that Vioxx, and not other risk factors, caused injuries. Of the 16 cases that went to trial, Merck won 11; however, at the first Vioxx trial, a jury in August 2005 awarded a Texas widow $253.4 million—later reduced to $27.2 million, including interest.

Lawyers around the country objected to a clause that required them to recommend the settlement to either all or none of their clients and to take steps to drop those who wished to opt out.  Lawyers contesting that all or nothing provision filed motions citing ethical obligations to provide clients individual counsel not predicated on potential conflicts of interest.  They have either withdrawn the motions or indicated their intention to do so and there are no pending motions related to the settlement plan.  Merck agreed to remove the $600,000 cap on supplementary payments to individual claimants able to prove "extraordinary injury.”