Merck Agrees to Settle Vioxx Litigation for $4.85 Billion

November 11, 2007

On Friday, Merck & Co., Inc. announced that it had agreed to settle thousands of lawsuits filed against the company by patients who took Vioxx and suffered either a heart attack or stroke. While this sounds like a lot, it is far less than original estimates of liability the company faced when it withdrew its blockbuster arthritis drug on September 30, 2004.

There are also several conditions attached to the offer, which will, no doubt, exclude a number of individuals who had earlier filed suit.

From the beginning, Merck vowed to fight each and every lawsuit without settling a single claim. And, while Merck did fight hard during these last two years, the settlement acknowledges a rather common and typical outcome with these types of cases.

Defendants often settle cases based on not only their potential exposure to liability but also based upon the hard costs associated with trying cases. In the end, Merck’s directors and shareholders will agree that it is by far much cheaper to settle these cases than to try each and every one.

And, so, there will be a lot of Monday-morning quarterbacking about this deal. Some will say that Merck executed the deal with tactical skill and precision. Others will say that the Plaintiffs’ lawyers rallied together and drove the settlement by increasing litigation costs and pushing hundreds of cases through expedited discovery.

Let’s hope, though, that in the end, the lesson we take from this is that drug companies must be more accountable for their actions and must make safety a top priority in both the research and development of medications.