Vioxx is chemically rofecoxib and belongs to a class of drugs called COX-2 inhibitors. It is a selective non-steroidal anti-inflammatory drug (NSAID) approved by the FDA in May 1999. It was primarily used relief of the signs and symptoms of osteoarthritis, for the management of acute pain in adults, and for the treatment of menstrual symptoms. Later on the FDA approved its use in rheumatoid arthritis in adults and children.

The drug was touted as a blockbuster for Merck. However problems with it began emerging soon after. Merck pulled the drug in September 2004 following a study, which showed Vioxx doubled the risk of heart attacks and strokes in patients who took it for more than 18 months. The company is facing at least 27,000 product liability lawsuits.

Some 20 cases have come to trial so far with Merck winning most of them. However it lost the first suit and was slapped with a verdict of $253 million.

According to the New York Times, Merck has so far paid $1.2 billion in Vioxx-related legal fees. The news about the agreement will surely gladden the heart of investors and put to rest fears that Vioxx litigation would bankrupt the company.

"The agreement is structured to provide a significant degree of certainty toward resolving the majority of the outstanding VIOXX product liability claims in the United States for a fixed amount," said a statement issued by Richard T. Clark, chairman, president and chief executive officer of Merck.

Merck has divided the funds between myocardial infarction claims, which will get $4 billion and ischemic stroke claims, which will get $850 million.

However the company has identified certain conditions that have to be met prior to claiming compensation. Merck says
* The agreement is limited only to US citizens and to those who claim that their MI or ischemic stroke occurred in the United States.
* To qualify, claimants will have to pass three gates: an injury gate requiring objective, medical proof of MI or ischemic stroke (as defined in the agreement), a duration gate based on documented receipt of at least 30 VIOXX pills, and a proximity gate requiring receipt of pills in sufficient number and proximity to the event to support a presumption of ingestion of VIOXX within 14 days before the claimed injury
* Individual cases will be examined by administrators of the resolution process to determine qualification based on objective, documented facts provided by claimants, including records sufficient for a scientific evaluation of independent risk factors;
* The agreement provides that Merck does not admit causation or fault
* Law firms on the federal and state Plaintiffs' Steering Committees and firms that have tried cases in the coordinated proceedings must recommend enrollment in the program to 100 percent of their clients who allege either MI or ischemic stroke

"This agreement is the product of our defence strategy in the US during the past three years and is consistent with our commitment to defend each claim individually through rigorous scientific scrutiny," said Bruce Kuhlik, Merck's senior vice-president.

Analysts say the agreement vindicates Merck's strategy of allowing the multiple product liability claims to go to trial rather than agree to a quick settlement.
 

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