At Monday`s hearing, Timothy O`Brien, counsel for the plaintiffs at Levin, Papantonio, Thomas, Mitchell, Rafferty and Proctor, said the plaintiffs` law firms had until January 13 to give their intention to participate in the settlement process. “This is a good, responsible agreement that will allow the company to focus even more on its mission to discover, develop and deliver new drugs and vaccines,” Merck CEO Richard Clark said on a conference call with Wall Street analysts and media reporters. The agreement, which lawyers said was signed before dawn Friday in New Orleans, requires law firms, which coordinate much of the Vioxx process, to recommend the participation of all clients who have had a heart attack or stroke. The agreement would only enter into force if 85% of the complainants abandoned and participated in their shares. The plaintiffs have until March 31 to withdraw from the agreement, merck Strain`s lawyer at the law firm Venable said after Monday`s hearing. He said Merck had until May 15 to decide whether to continue the agreement or not. The comparison would solve much of the 5,255 product liability cases Merck faces with respect to Fosamax, a single blockbuster drug with a turnover of $3 billion in 2007. The agreement was reached after Merck adopted a $1.9 billion legal strategy to try each Vioxx case individually. Kenneth Frazier, Merck`s executive vice president and former general counsel, said the strategy paved the way for comparison, as the company won 11 and lost five of the Vioxx lawsuits that have already passed the verdict. After several weeks of negotiations, Merck came to the comparison with lawyers who are on the executive committee representing the plaintiffs` lawyers who sued Merck in federal court. These lawyers and a handful of others represent most of the 47,000 different groups of complainants.
The agreement is not a class action covering all applicants. Instead, each claim is assessed individually. If certain conditions are met, the company stated that it would pay the amount of compensation to a fund to pay the claims of legitimate victims, with the first payments beginning as early as August 2008. Merck`s lawyers and plaintiffs announced the proposed transaction at a court hearing in New York, at 1,140 lawsuits pending in federal and regional courts. Any transaction should be approved by a judge. But for Merck, which has already spent more than $1.2 billion on Vioxx-related legal costs, the comparison will allay fears that the lawsuits against Vioxx could drive the company into bankruptcy or even have significant financial consequences. While the settlement is impressive, it represents less than a year of profit for the company, the third-largest U.S. drug manufacturer. Based on the fact that the 27,000 complaints cover approximately 47,000 groups of complainants, the average complainant will receive just over $100,000 before legal fees and fees, which typically swallow between 30 and 50 per cent of payments to complainants. Complainants who do not want to accept the transaction can pursue their own claims, but as so many trial lawyers in the United States approve of the agreement, they may have difficulty doing so.
Since the drug`s withdrawal, Merck has filed some 26,000 complaints with 47,000 people. Merck initially planned to fight any lawsuits and debauched $1.9 billion in legal fees, but last year it decided to offer a deal. The agreement justifies Merck`s risky decision to take cases to court instead of accepting a quick and quick deal. By aggressively defending itself, Merck discovered the weaknesses in the cases of many plaintiffs. Some complainants were unable to prove that they had taken the drug, and others were overweight, smoking or had other risk factors for myocardial infarction. “The main activity went very well. The only thing that really got in their way was Vioxx,” says Funtleyder.