Tuesday, January 30, 2007
Merck today reported a heavy decline in fourth quarter profits despite an increase in revenues, due in signficant part to litigation over its painkiller Vioxx and osteoporosis treatment Fosamax. Here's an excerpt from a report by Linda Johnson (AP) on BusinessWeek.com -- Merck 4Q Earnings Plummet 58 Percent:
Merck & Co. reported Tuesday that fourth-quarter profit plunged 58 percent despite higher revenues as the drugmaker took a slew of charges for restructuring costs, an acquisition and increased legal reserves, mainly for its withdrawn painkiller Vioxx.
On the litigation front, Merck reported that as of Dec. 31 it faced approximately 27,400 lawsuits, some involving multiple plaintiffs, alleging harm from Vioxx. The company pulled the one-time blockbuster arthritis pill from the market in September 2004 after research showed it increased risk of heart attacks and strokes.
Merck also said it faces about 265 potential Vioxx class-action lawsuits alleging personal injury or economic loss, and has entered about 14,180 agreements with other potential claimants suspending the time limit for them to sue.
The company said it added $75 million to its Vioxx legal defense fund in the quarter, after adding $598 million in the third quarter and $295 million in 2005.
It set aside another $48 million to start a legal defense reserve for lawsuits alleging that Fosamax destroys bone in the jaw; the company faces more than 100 such lawsuits.