Merck & Co. Inc. has agreed to settle a class action lawsuit filed on behalf of Missouri consumers over the prescription pain reliever Vioxx. The settlement is expected to cost the drugmaker up to $220 million. The agreement would settle claims that Merck violated the Missouri Merchandising Practices Act by promoting and selling Vioxx, which Merck pulled from the shelves eight years ago because it was causing heart attacks and strokes. The agreement must still be approved by the Jackson County Circuit Court in Kansas City.
It was unclear how many consumers might seek reimbursement, which will ultimately determine the value of the settlement. Interestingly, Merck took a $39 million third-quarter write-off to help pay for the settlement. As part of the agreement, the company agreed to pay attorneys’ fees and other costs such as advertising to alert consumers.
The Food and Drug Administration approved Vioxx as a painkiller in May 1999 but the Justice Department said Merck began marketing it almost immediately as a treatment for rheumatoid arthritis. Companies are prohibited from marketing drugs for conditions that have not been approved by the FDA. Vioxx wasn’t approved for treatment of rheumatoid arthritis until 2002.
Merck removed Vioxx from the market in September 2004. The Justice Department charged Merck with violating marketing laws and said the company made false statements about its cardiovascular safety to increase sales. In April, a federal court in Massachusetts accepted Merck’s guilty plea to one misdemeanor count of violating marketing laws, and Merck agreed to pay $950 million. That settlement resolved complaints brought by 43 states and Washington, D.C. Missouri was among the 43 states in that case, receiving $13.8 million from Merck. While the nationwide suit was over marketing, the newly-resolved Missouri case alleged consumer fraud. It was in litigation for eight years. The settlement provides for payment to Vioxx consumers under two options:
• A one-time cash payment of $180 for those who submit a claim form and declare their use of the drug under oath. They do not need to prove that they purchased Vioxx.
• $90 for each month of Vioxx purchases. Those consumers must show proof of payment, such as a letter from the prescribing physician.
As you will recall, Merck settled around 50,000 individual patient lawsuits in November 2007 for $4.85 billion. Our firm was heavily involved in that litigation. Andy Birchfield, who heads up our firm’s Mass Torts Section, played a key role in negotiating the record-breaking settlement. Don Downing, a lawyer with Gray Ritter & Graham, and Patrick Steve, with Stueve Siegel Hanson, served as co-counsel for the Plaintiffs in the Missouri case. They did a very good job for members of the class.
Source: Associated Press
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