In almost a decade old battle, Merck & Co. Inc. has agreed to settle a class action lawsuit filed on behalf of Missouri consumers over its prescription pain reliever Vioxx in a deal that could cost the drugmaker up to $220 million, lawyers for the consumers said.
According to CNBC, the agreement announced on November 1, 2012 would settle claims that New Jersey-based Merck violated the Missouri Merchandising Practices Act by promoting and selling Vioxx, which Merck pulled from the shelves eight years ago because of evidence that it doubled users’ chances of suffering a heart attack or stroke.
As of now, it is unclear how many consumers might seek reimbursement, which will ultimately determine the value of the settlement.
Merck took a $39 million third-quarter write-off to help pay for the settlement. As part of the agreement, the company agreed to pay attorneys’ fees and other costs such as advertising to alert consumers.
Merck admitted no wrongdoing as part of the settlement. Bruce N. Kunlik, executive vice president and general counsel for Merck, said in a news release that it “reduces the uncertainty and ongoing defense costs and helps us remain focused on bringing forward innovative products and services for our customers.”
The Food and Drug Administration approved Vioxx as a painkiller in May 1999 but the Justice Department said Merck began marketing it almost immediately as a treatment for rheumatoid arthritis. Companies are prohibited from marketing drugs for conditions that have not been approved by the FDA. Vioxx wasn’t approved for treatment of rheumatoid arthritis until 2002.
Merck removed Vioxx from the market in September 2004. The Justice Department charged Merck with violating marketing laws and said the company made false statements about its cardiovascular safety to increase sales.
In April, a federal court in Massachusetts accepted Merck’s guilty plea to one misdemeanor count of violating marketing laws, and Merck agreed to pay $950 million. That settlement resolved complaints brought by 43 states and Washington, D.C. Merck did not acknowledge liability or wrongdoing.
Missouri was among the 43 states in that case, receiving $13.8 million from Merck. While the nationwide suit was over marketing, the newly resolved Missouri case alleged consumer fraud. It was in litigation for eight years.
Vioxx consumers can choose one of two settlement options:
—A one-time cash payment of $180 for those who submit a claim form and declare their use of the drug under oath. Attorneys said they do not need to prove that they purchased Vioxx.
—$90 for each month of Vioxx purchases. Those consumers must show proof of payment, such as a letter from the prescribing physician.
Merck settled around 50,000 patient lawsuits in November 2007 for $4.85 billion. The company won about two-thirds of the Vioxx personal injury lawsuits that went to trial.
“This agreement is in the best interest of the company and its shareholders,” Bruce N. Kuhlik, Merck executive vice president and general counsel, said in a statement. “It reduces the uncertainty of litigation and ongoing defense costs, and helps us to remain focused on bringing forward innovative products and services for our customers.”
The agreement is pending as it must still be approved by the Jackson County Circuit Court in Kansas City.[hr]