Sunday, October 22, 2006
Merck reported Friday that it added $598 million to its reserves for Vioxx litigation costs. The company noted that as of September 30, 2006 (two years after the drug was withdrawn from the market), it faced approximately 23,800 suits including approximately 41,750 plaintiff groups, according to this article in the Philadelphia Inquirer by Linda Johnson (AP):
The struggling Whitehouse Station drugmaker added $598 million to its reserves for future legal defense costs over its withdrawn pain reliever Vioxx, as the number of personal-injury suits Merck faces topped 24,000.
Merck had previously reserved a total of $970 million for defense costs since pulling Vioxx, its onetime blockbuster, from the market on Sept. 30, 2004. Through this September, Merck had spent $610 million.
It said that as of Sept. 30, about 23,800 Vioxx lawsuits, including about 41,750 plaintiff groups, had been filed. An additional 275 potential class-action suits claiming personal injury or financial losses also have been filed, and about 15,000 potential plaintiffs had entered agreements temporarily suspending the time limit for them to sue.
Byron Stier's post on Friday noted that with a clearer sense of the number of lawsuits (filed within the two-year period of many of the applicable statutes of limitations), Merck can better estimate its remaining Vioxx litigation costs.
Roger Parloff discusses the developments on his Legal Pad blog, including a lengthy and interesting quote from Kent Jarrell, a spokesperson for Merck's law firm, Hughes Hubbard & Reed, predicting that most of the recently filed cases will prove relatively weak. Ted Frank also comments at Point of Law.