Sept. 25 (Bloomberg) — Merck & Co. is paying claims by the families of more than 3,100 users of its Vioxx painkiller who died of heart attacks or strokes blamed on the drug, according to a law firm administering a $4.85 billion settlement fund.
The fund will pay about 3,000 claims for heart attack deaths and at least 122 strokes, according to BrownGreer LLP, a claims administrator appointed by both sides. Merck introduced Vioxx in 1999 and withdrew it in 2004 when a study showed the drug doubled the risk of heart attacks and strokes. Merck set up the fund, which covers claims of death and lesser injuries, in 2007 after reserving $1.9 billion to fight 26,600 Vioxx suits.
“We don’t know any drug right now with this number of deaths associated with it,” said Houston attorney Mark Lanier, a Vioxx plaintiffs’ lawyer who is appealing the reversal of a $256 million verdict against Merck. “This is a very sad chapter in the American tragedy of pharmaceutical companies gone wild.”
Merck, which is set to buy rival Schering-Plough Corp. by the end of the year, won 11 of 16 Vioxx suits at trial before agreeing to settle all claims. Under the accord, the facts of each case determine the extent of Merck’s liability, which analysts once estimated to be as much as $20 billion overall. BrownGreer said it’s almost done reviewing 48,507 claims. So far, the firm has rejected 40 percent of them.
Merck rose as much as 2.3 percent on news of the company payout of the 3,100 death claims. The shares increased 42 cents to $31.43 at 12:28 p.m. in New York Stock Exchange composite trading after touching $31.71.
“It’s a good thing to clear the deck before you merge with Schering. You want to clear off all these outstanding issues so you can merge in peace. It’s one less distraction,” said Les Funtleyder, a health-care analyst with Miller Tabak & Co. in New York, in a telephone interview.
Families of heart attack victims who died will get an average payment of about $374,000, according to BrownGreer. Some will get as little as $5,000 and others more than $1.5 million, depending on the Vioxx user’s age, how long they took the drug and whether they had health risks such as obesity or hypertension, said Andy Birchfield, a plaintiff’s lawyer in Montgomery, Alabama, who helped negotiate the settlement.
“The settlement relies on objective criteria,” said Merck attorney Ted Mayer of Hughes Hubbard & Reed LLP in New York. “There’s no admission regarding causation or fault. The track record in the courtroom is that plaintiffs failed again and again to establish causation.”
Claimants taking part in the settlement don’t have to prove Vioxx caused their specific injuries. Details on the payments to individual claimants, who are ranked on one of six levels, are confidential. Claimants’ lawyers will be paid as much as $1.55 billion of the settlement fund.
Orran Brown, chairman of BrownGreer, said the fund will pay “an unspecified number” of claims on behalf of Vioxx users whose deaths didn’t meet the criteria for payments related to the drug’s use. He said the number hasn’t been disclosed publicly and he wasn’t authorized by Merck and plaintiffs’ lawyers to release it.
“I have no doubt in my mind it’s more than 3,000 deaths,” plaintiffs lawyer Lanier said. “I don’t think we’re seeing the real number of deaths. The true number is being buried in history.”
‘It’s Plenty Bad’
David Logan, dean of Roger Williams University Law School in Rhode Island, said after being told the figure, that “it’s plenty bad that the numbers are that high.”
Merck, based in Whitehouse Station, New Jersey, settled after battling plaintiffs who claimed in state and federal courts that it didn’t adequately disclose Vioxx safety data to the U.S. Food and Drug Administration, didn’t properly warn doctors and patients of the drug’s risks and misrepresented the potential harm in marketing materials.
Plaintiffs claimed Merck should have moved more quickly to warn about the dangers of Vioxx after a 2000 study reported that the medicine caused five times more heart attacks than another painkiller, naproxen. Merck took two years to negotiate a change in Vioxx’s label on side effects with the FDA.
“Merck acted responsibly in studying the medicine and sharing data with the FDA and physicians and in voluntarily withdrawing Vioxx from the marketplace in 2004,” Merck lawyer Mayer said.
Jerome Avorn, a Harvard Medical School professor, said “clearly there were preventable heart attacks and strokes.”
“The company’s own data makes it clear that if people had not been on that drug, they would not have had heart attacks or strokes,” Avorn said. The goal should be to “spot these problems far earlier than the five years it took with Vioxx.”
Avorn, who wrote a paper warning of the drug’s risks before it was pulled from the market, testified for no fee as an expert witness in Vioxx litigation on behalf of plaintiffs.
“Many of the deaths could have been avoided,” Bruce Psaty, a professor of medicine and epidemiology at the University of Washington, said in an interview. “Merck had information that they did not provide to the public, the FDA and patients in a timely fashion. Patients were not able to make an informed decision.”
Tripled the Risk
Psaty wrote an article in the Journal of the American Medical Association last year that criticized how Merck handled data from clinical trials in 2001 showing Vioxx tripled the risk of death in Alzheimer’s disease patients.
“All drugs can hurt people,” said Psaty, a drug-safety expert. “Some of the people who were injured or died may have chosen not to take the drug had they been fully informed about the risks.”
By settling the litigation, Merck averted trials on potentially inflammatory cases, including one filed in state court in Atlantic City, New Jersey, by Susan Weiss of Greenwich, Connecticut.
Her husband, Charles, 61, died next to her on a flight to Hong Kong on Dec. 6, 2003. A doctor on the plane tried for 45 minutes to revive him.
“There was no place to move the body because the plane was full,” Weiss said in a pretrial deposition filed by Merck with the court in 2006. She held her husband for another five hours, she said.
Didn’t Know Outcome
Weiss’s attorney Benedict Morelli didn’t return calls seeking comment on the disposition of the case. Mayer said he didn’t know the outcome of BrownGreer’s review of Weiss’s claim.
Other Vioxx death settlements have been outlined in court papers. The family of a man who died of a heart attack is asking a state court judge in Illinois to approve a $121,000 settlement of their claims against Merck, according to the Madison Record newspaper.
After more than $38,000 in attorneys fees are deducted from the accord, Nathaniel Webster’s family will be left with $76,418.88, the newspaper said Sept. 16, citing a court filing.
Merck is paying a total of $4 billion on heart attack claims and $850 million for strokes, according to the settlement.
BrownGreer analyzed records to verify whether plaintiffs had heart attacks or strokes, were dispensed at least 30 Vioxx pills and ingested the drug within 14 days of the injury.
BrownGreer, based in Richmond, Virginia, analyzed the eligibility of 30,480 heart attack claims, rejecting 32 percent, according to a Sept. 17 report to a federal judge in New Orleans overseeing the settlement. The firm has tentatively denied 56 percent of 18,027 stroke claims, with 510 still under review.
For plaintiffs who passed the three tests, BrownGreer assigned points using data such as age, duration of use, and health risks like smoking. The average fatal heart attack case scored 201 points out of 1,000 and will result in a payment of from $373,209 to $375,216, according to the report.
Through the end of August, BrownGreer paid $1.4 billion to heart attack claimants from the Merck fund. The firm will pay most of the balance of the $4 billion fund to more than 20,000 claimants after Sept. 30. Stroke claimants have received $69.8 million of the $850 million so far.