Settlement limits insurers’ claims in Vioxx deal

posted on:
January 22, 2009

author:
Associated Press

TRENTON, N.J. (AP) — Former Vioxx users getting part of a $4.85 billion settlement ending most personal injury suits over the withdrawn painkiller will get a bigger piece of the pie, thanks to an unusual settlement Thursday with their health insurers.

Insurers who paid medical expenses for claimants in the settlement — one of the largest ever in the pharmaceutical industry — have been trying to recoup their expenses from the claimants. The insurers placed liens against any amounts recovered by thousands of former Vioxx users or their survivors, and unsuccessfully tried to make plaintiff lawyers disclose identities of all Vioxx claimants.

Under an agreement approved Thursday by U.S. District Judge Eldon Fallon in New Orleans, the amount the more than 100 private insurers participating in the deal can recover from liens will be reduced by at least half. There’s also a sliding scale that limits the total an insurer can recover from each claimant, attorney Christopher Seeger, who negotiated the agreement, told The Associated Press in an interview.

Insurers could get at most 15 percent of a $100,000 settlement, or $15,000, and 10 percent of any settlements worth more than $250,000. It’s the first such settlement with insurers in a mass litigation case, Seeger said.

‘It’s a great deal for the (insurance) carriers. It’s a very good deal for the claimants,’ said Seeger, co-lead counsel for plaintiffs in the consolidated federal Vioxx cases.

Drugmaker Merck & Co., based in Whitehouse Station, N.J., pulled Vioxx off the market in September 2004 amid mounting evidence it greatly increased the risk of heart attack, stroke and death. That triggered tens of thousands of lawsuits from Vioxx users who claimed they were harmed.

A settlement was reached in November 2007 and finalized last August, with guidance from Fallon, who has been presiding over the federal lawsuits, and other judges handling large numbers of cases in state courts in New Jersey and elsewhere. The settlement will end roughly 50,000 personal injury suits involving users of the former blockbuster arthritis treatment who suffered heart attacks, strokes or died.

Seeger said the insurer agreement won’t delay payments to Vioxx claimants — most of whom have received only partial payments or nothing so far. He said it will dramatically speed up lien recoveries by insurers and save them legal costs. About 70 percent of insurers who filed liens are participating, and the deal is open to the others, he said.

Seeger said he has been working on the deal for six months, with support from Fallon.

He said plaintiff attorneys have already reached similar agreements to cover liens placed by the government Medicare and Medicaid insurance programs.

Since the first payments to claimants began going out last August, several thousand claimants have received initial payments. The law firm administering claims is now sending out a couple thousand checks per month, according to Seeger.

Source: AP/New York Times

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