Legal News

Merck Closes Yet Another Chapter in the Vioxx Nightmare

By Ashby Jones

It’s a dicey game making pharmaceuticals. Spend boatloads on R&D, trudge through the grueling process of getting FDA approval, spend gazillions more on marketing.

Sure, you might end up with a Lipitor, which has been a cash cow for Pfizer. But things can go the other way, too.

And that brings us to Vioxx, a nightmare from which Merck is still trying to awake.

The latest: Merck recently agreed to pay up to $12.15 million in legal fees and bolster its monitoring of drug safety to settle shareholder lawsuits stemming from the withdrawal of the drug. Click here for the WSJ story; here for the Bloomberg story.

Add it to the tally. In 2007, Merck agreed to a pay $4.85 billion to settle personal-injury claims of more than 40,000 people. In another settlement, the company will pay $80 million to resolve 190 claims filed by drug-benefit plans seeking to recover costs of paying for Vioxx use.

The latest pact, which is pending final court approval, would resolve state and federal shareholder “derivative” complaints — those brought by shareholders on behalf of a company — alleging that current and former Merck officers and directors breached their fiduciary duties in handling Vioxx. To help improve safety efforts, the company had already fulfilled one of the terms of the settlement by installing Chief Medical Officer Michael Rosenblatt in December.

Merck spokesman Ron Rogers said the settlement was “the most appropriate way for the company to put this matter behind it.” Merck didn’t admit liability or wrongful conduct, he added. Merck disclosed the proposed settlement in a regulatory filing Tuesday.

And yet, the Vioxx litigation remains far from over. The U.S. Supreme Court is weighing a separate shareholder case, seeking billions of dollars in damages from the company. Merck disclosed last year the U.S. Attorney’s office in Boston was conducting a grand-jury investigation of Merck’s handling of Vioxx. The claims of some 310 plaintiff groups are outstanding in courts in the U.S., according to the securities filing. There are also cases overseas, including Australia and Turkey.

Full post as published by Law Blog - WSJ.com on February 11, 2010 (boomark / email).