Merck & Co. announced that enough people have signed on to pending $4.85 billion Vioxx settlement to keep the deal alive. More than 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.
Vioxx was pulled from the market in 2004 when the widely used painkiller was linked to heart attacks and strokes. After a few years of fighting individual cases, a comprehensive settlement was proposed in last November.
WHITEHOUSE STATION, N.J., March 3, 2008 - Merck & Co., Inc. today said that more than 44,000 of the approximately 47,000 individuals who registered eligible injuries have submitted some or all of the materials required for enrollment that could qualify them for an interim payment in the program to resolve state and federal myocardial infarction (MI) and ischemic stroke (IS) claims filed against the Company in the United States. If all of these eligible submissions are completed in accordance with the Settlement Agreement, this would represent more than 93 percent of the eligible MI and IS claims previously registered with the program. In addition, approximately 5,000 other claimants have also sought to enroll and their eligibility status still has to be determined.
As of Feb. 29, the Claims Administrator reports more than 27,750 eligible MI claimants have initiated enrollment, more than 16,000 eligible IS claimants have initiated enrollment, more than 5,500 eligible MI and IS claimants alleging death as an injury have initiated enrollment, and more than 26,500 eligible MI and IS claimants alleging more than 12 months of use have initiated enrollment. Each of these numbers appears to represent at least 93 percent of the eligible claims in each category. These numbers do not include the additional 5,000 enrollees whose eligibility has yet to be determined.
"We are very pleased with the large number of enrollments we are seeing and are confident that when the enrollments are verified, all 85 percent thresholds will be met and exceeded within the timeframes in the agreement," said Ted Mayer, of Hughes Hubbard & Reed, one of Merck's coordinating defense counsel. "We are now working with the Claims Administrator to examine the registration and enrollment materials that have been received and continue to come in. There is a considerable amount of documentation that has to be reviewed before the definitive determination can be made that the thresholds have been met."
The timely meeting of the thresholds with enrollment documents in compliance with the Settlement Agreement would obligate Merck to pay $4.85 billion in installments into the resolution fund.
The thresholds are: (a) 85 percent or more of all eligible MI claims; (b) 85 percent or more of all eligible IS claims; (c) 85 percent or more of all eligible claims claiming death as an injury; and (d) 85 percent or more of all eligible claims alleging more than 12 months of use.
Claimants Eligible for Interim Payments
Under the Nov. 9, 2007 agreement, U.S. claimants who enroll in the resolution program by Feb. 29, are eligible to receive an interim payment, provided the claim ultimately qualifies for payment.
In recent weeks, several plaintiffs' firms reported that a substantial number of claimants who wanted to enroll needed additional time to submit complete enrollment packages. As a result, the Company and the plaintiffs' firms decided that claimants who have submitted initial submissions by Feb. 29 will receive a 31-day grace period, ending March 31, to complete their enrollment submissions with additional documentation, including properly executed releases and medical record authorization forms.
Provided the submissions are completed and verified, and participation thresholds are reached in a timely manner, those claimants will be eligible for interim payments, starting as early as August.
Under the settlement agreement, Merck does not admit causation or fault with respect to these claims.
Merck Confirms that Eligible Claimants Can Still Enroll in Resolution Program
Eligible claimants who do not qualify for interim payments may still enroll in the resolution program if the claims were filed or tolled prior to Nov. 9, 2007 and their claims will be counted toward the participation thresholds as provided by the agreements. If participation thresholds are met in a timely manner, claimants will be able to enroll in the program through Oct. 30.
Criteria Under the Agreement
The resolution program is open only to U.S. legal residents and claimants whose alleged injury occurred in the United States.
To qualify for a payment, claimants also must satisfy three eligibility gates: 1) an injury gate requiring objective, medical proof of MI or IS (as defined in the agreement); 2) a duration gate based on documented receipt of at least 30 VIOXX pills; and 3) a proximity gate requiring receipt of pills in sufficient number and proximity to the event to support a presumption of ingestion of VIOXX within 14 days before the claimed injury.
Claimants who satisfy the eligibility gates will have their claims further evaluated by the Claims Administrator, who will make an objective evaluation of documented medical injuries and specific risk factors. This evaluation will be the basis for determining the amount to be paid to each claimant.
The Company recorded a fourth-quarter 2007 pre-tax charge in the amount of $4.85 billion to cover the cost of the agreement.
The Company will continue to defend all claims that are not included in the resolution program.
Status of Litigation
Juries had decided in favor of the Company 12 times and in plaintiffs' favor five times. One Merck verdict was set aside by the court and has not been retried. Another Merck verdict was set aside and retried, leading to one of the five plaintiff verdicts. There have been two unresolved mistrials.
As of Dec. 31, 2007, in the United States, the Company had been served or was aware that it had been named as a defendant in approximately 26,500 lawsuits, which include approximately 47,275 plaintiff groups alleging personal injuries resulting from the use of VIOXX, and in approximately 262 putative class actions alleging personal injuries and/or economic loss.
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