Verdicts & Settlements

$4.85B Vioxx Settlement to End Merck’s $600M Annual Legal Fees

Merck has agreed to settle 27,000 lawsuits over its pain medication Vioxx for $4.85 billion.

The settlement is one of the largest ever in a civil suit, the New York Times reports. Merck had pledged never to settle, the Wall Street Journal reports (sub. req.), but its legal defense fees alone were running $600 million a year. It has spent a total of $1.2 billion on the litigation so far.

The settlement is binding only if 85 percent of the plaintiffs agree to it. The average recovery will be $100,000 before legal fees and expenses.

The deal was expected to be announced today in a New Orleans federal court.

Merck was ordered to pay a huge $253.5 million in an August 2005 verdict on behalf of a man who died while taking the medication. The amount was automatically reduced to $26.1 million under Texas law. The company won 11 cases and lost four others. The New Jersey Supreme Court had refused to approve a nationwide class action against the company that advocated a “fraud on the market” theory.

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