Share on Google Plus Share on Twitter Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend

Printer Friendly Page Save As Favorite View Favorites (# of views)   No comments
General News

Merck Legal Team Makes A Killing Off Losing Vioxx Strategy

By       Message Evelyn Pringle     Permalink
      (Page 1 of 4 pages)
Related Topic(s): ; ; ; ; ; ; ; ; ; ; (more...) ; ; ; ; , Add Tags  (less...) Add to My Group(s)

View Ratings | Rate It

opednews.com

- Advertisement -
Merck Legal Team Makes A Killing Off Losing Vioxx Strategy

Not much has changed at Merck since Vioxx was pulled off the market. The only difference for shareholders is that instead of spending hundreds of millions of dollars a year to promote Vioxx, the attorney's fees are now costing hundreds of millions of dollars a year.

- Advertisement -
As of December 31, 2004, Merck had established a reserve of $675 million solely for legal defense costs related to Vioxx, according to the company's 2005 annual report.

During 2005, the report said, Merck spent "$285 million in the aggregate in legal defense costs worldwide" related to Vioxx.

In the fourth quarter of 2005, Merck recorded a charge of $295 million to increase the reserve solely for its future legal defense costs related to Vioxx, the report said, to $685 million as of December 31, 2005.

'This reserve is based on certain assumptions," Merck told shareholders, "and is the best estimate of the amount that the Company believes, at this time, it can reasonably estimate will be spent through 2007."

- Advertisement -
That said, the company has not set aside one dime for potential damage awards in Vioxx trials through 2007. Which means the only good news to report as far as Merck's legal strategy of a case by case defense of thousands of lawsuits in the years ahead, is that the company's legal team will keep raking in dough while Merck slowly goes under.

We now know that tens of thousands of people died, and many more were injured, because Merck concealed the information about the adverse effects of Vioxx. But to date, Merck has not paid one red cent in damages. And the appeals process initiated by Merck attorneys, guarantees that that money awarded to any plaintiff so far will be years away. And even then, experts say, the close to $300 million in damages awarded will be reduced to $48 million by caps on punitive damages.

In addition to the thousands of personal injury and wrongful death claims, Merck also faces class actions, filed on behalf of prescription drug plans and insurance carriers seeking treble damages, that experts say could expose Merck to multi-billion dollar verdicts.

The plaintiffs in the class actions allege that Merck misrepresented the safety profile of Vioxx, ignoring clear and early warning signs of its risks in order to continue its sale, and that had they known the truth, they would not have included Vioxx as an approved drug or agreed to reimburse plan members for its high cost. They also contend that Vioxx was no more effective than over-the-counter painkillers already on the market.

In seeking reimbursement, these plaintiffs will not have to prove that Vioxx caused any injuries or deaths. All they will have to show is that Merck continued to push Vioxx after it knew about the drug's increased risks.

And on top of the class action monsters, there is the pesky little matter of lawsuits filed on behalf of the individual states that also have the potential to expose Merck to billion dollar damage awards. The state actions are similar to the class actions and seek repayment for money paid for Vioxx by state run health care programs like Medicaid.

The damages sought are huge. For instance, Texas Attorney General, Gregg Abbott, is seeking $168 million and says he can prove total damages in excess of $250 million over five years in payments for Vioxx.

- Advertisement -
According to Merck's 2005 annual report, "The Company has received a Civil Investigative Demand from a group of the Attorneys General of 31 states and the District of Columbia who are investigating whether the Company violated state consumer protection laws when marketing VIOXX. The Company is cooperating with the Attorneys General in responding to the Civil Investigative Demand."

The state of New York's Controller, Alan Hevesi, claims his state's retirement fund lost $171 million when Merck's stock value dropped and that teachers, policemen, and firefighters have lost $287 million all total from their retirement funds.

The NY suit alleges that Merck violated federal securities laws by failing to disclose information about the safety risks of Vioxx. "The New York State Common Retirement Fund is exactly the kind of sophisticated and knowledgeable financial institution that the Congress, in the 1995 Private Securities Litigation Reform Act, intended to lead such class action suits," Mr Hevesi said in a press release.

Next Page  1  |  2  |  3  |  4

 

- Advertisement -

View Ratings | Rate It

Evelyn Pringle is a columnist for OpEd News and investigative journalist focused on exposing corruption in government and corporate America.

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon



Go To Commenting
/* The Petition Site */
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Glaxo Promotes Mental Disorders - Then Paxil

Government Investigation Finds Autism Vaccine Related

Paxil Five-Year Litigation History

Suicide Risk of Neurontin Kept Hidden for Years

Gambro Healthcare - Dialysis Fraud Pays Big Bucks

Johnson & Johnson Chirate Spinal Disc Under Fire