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Merck's Vioxx Payouts to Begin in August

Jul 18, 2008 | Parker Waichman LLP

New Jersey-based Merck & Company will begin funding $4.85 billion to resolve state and federal claims over its painkiller Vioxx.  The first payment of $500 million is scheduled for August 6; additional payments will follow.  Merck said it met its threshold to make these payouts and waived its right to walk away from last November’s agreement to settle roughly 50,000 lawsuits.

After years of litigation, a comprehensive settlement was proposed in November under which Merck agreed to compensate plaintiffs who can show, under certain conditions, that taking Vioxx is connected to their having suffered a heart attack or stroke.  More than 48,500 of about 50,000 people—about 97 percent of all eligible claimants—registered, exceeding the 85 percent required threshold.  In addition, Merck extended the enrollment deadline to October 30, 2008 for eligible plaintiffs.  According to the Associated Press, “payouts are expected at a minimum of $5,000 up to a few million dollars” to “former Vioxx users, or their survivors.”  To be eligible, “They must have had pending lawsuits or tolling agreements, which suspend the statute of limitations, as of November 9, 2007, the date the settlement was reached.”

Merck pulled Vioxx from the market on September 30, 2004 after its study showed that long-term Vioxx users had twice the risk of heart attack and stroke.  Merck also agreed to a $58 million settlement with Washington, the District of Columbia and 28 other states in May over deceptive marketing of Vioxx.  In April, two reports published in the Journal of the American Medical Association (JAMA) found that two Merck-funded studies investigating the benefits of Vioxx in Alzheimer’s minimized death rates.  The reports also revealed that Merck hired outside firms to write Vioxx studies, paying prominent researchers to list their names as research authors.

A consent judgment against Merck, filed in Suffolk Superior Court, prevents the New Jersey-based drug maker from misleading consumers in future advertising and mandates full disclosure of all known risks of Merck drugs.  The judgment bans the deceptive use of scientific data when marketing doctors and “ghost writing” articles and studies and addresses conflict of interest issues.  Also, Merck must obtain Food & Drug Administration (FDA) approval for direct to consumer television drug advertisements and must comply with regulatory recommendations if the FDA calls for a delay in such advertising.  In 2000, Merck spent $160.8 million on direct to consumer Vioxx marketing.

Vioxx—refecoxib—is in a class of drugs called nonsteroidal anti-inflammatory drugs (NSAIDs) and works by reducing substances that cause inflammation, pain, and fever.  A three-year study aimed at showing that Vioxx—at a 25-milligram dose—prevents recurrence of polyps in the colon and rectum was ceased when Merck discovered a higher heart risk compared to patients taking placebos.  Prior to the Vioxx withdrawal, the FDA announced that patients taking Vioxx had a 50 percent greater chance of heart attack and sudden cardiac death and patients taking the highest recommended daily dosage of Vioxx had three times the risk of heart attack and sudden cardiac death as those not taking standard painkillers.

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