TRENTON - Partial payments for people claiming that withdrawn painkiller Vioxx caused heart attacks will go out starting Aug. 28 under the $4.85 billion settlement between drugmaker Merck & Co. and plaintiffs' lawyers, the claims administrator said today.
Those payments will amount to about 40 percent of each plaintiffs' estimated total payout, but it's unclear how many people will be getting checks in the first batch going out.
The settlement, meant to end the bulk of personal injury lawsuits against Whitehouse Station, N.J.-based Merck, was reached last November. Three years earlier, Merck pulled Vioxx from the market on Sept. 30, 2004, after its own research showed that the once-blockbuster arthritis pill doubled the risk of heart attack and stroke.
During the monthly status conference with the federal judge in New Orleans coordinating most of the massive Vioxx litigation, Orran Greer of claims administrator BrownGreer PLC said 49,954 eligible claimants have now registered for a settlement. That amounts to more than 97 percent of claimants eligible for the settlement - well above threshold levels that the company required for the deal to proceed - and most of the others cannot be located by their lawyers, Greer told U.S. District Judge Eldon Fallon.
Greer said Merck waived its right to walk away from the settlement on Aug. 4 and, over the next two days, deposited $500 million in one escrow account and gave the claims administrators a letter of credit worth up to $4.1 billion to cover payments to claimants.
His firm now is painstakingly reviewing millions of pages of documents submitted by claimants, electronically or on paper, for accuracy and to make sure that no documents, particularly those releasing Merck from any future legal liability, are missing or incomplete.
Lynn Greer, also of BrownGreer, said 44,680 claimants have submitted at least some of the required materials and those missing items are being notified. She said 3,441 claimants have reached the stage where administrators are determining how many points they get toward a settlement amount - decided by a complicated formula that factors in how serious a claimant's injury was, how much Vioxx was taken and how many health risk factors the person had.
"Our projected value of each point [is] in excess of $1,900," she said, adding, "it is unprecedented that claims can begin going out in an eight-month period" since the complex settlement process began.
The four-year legal saga begun when Merck yanked Vioxx off the market, triggering tens of thousands of lawsuits, damaging Merck's once-spotless reputation, and forcing out its then-chief executive.
Settlement amounts can run from the minimum of $5,000 up to a couple of million dollars, but the federal government is arranging to be reimbursed for care provided to Vioxx users under the Medicare and Medicaid programs. Likewise, private insurers are seeking reimbursement, although Fallon has ruled that their claims cannot hold up interim payments to claimants.
Merck, which employs roughly 12,000 people at extensive operations around West Point, Montgomery County, still faces about 260 potential class-action suits, alleging either harm or financial losses related to Vioxx, that still must be resolved, plus two cases already certified as class actions in Canada.
The Vioxx case has cost Merck at least $7 billion, including more than $1.74 billion through July 31 on legal costs for defense research and individual trials, most of which it has won.
Vioxx, which was launched in 1999, brought Merck revenue of $2.5 billion at its peak in 2003 and a total of at least $11 billion.