Vioxx recall liability for Merck could be $38 billions

In a research report released by the respected analyst, Richard Evans, of Sanford C. Bernstein, an investment research and management firm, it is being estimated that Merck's Vioxx liabilities could be as high as $38 billion, according to an item published by Forbes.

Since the recall of Vioxx, analysts have tried to estimate total liabilities of Vioxx and estimates have so far ranged from $10 billion to $18 billion. According to Evans, however, if all the patients who had heart attacks and received just average-sized legal settlements, Merck's liability could be as high as $38 billion. Or in other words, it could go up if even higher damages were awarded to Vioxx victims.

In Evans' opinion, there are as many as 58,000 Vioxx victims who have had heart attacks and their average settlement will be approximately $650,000. But remember that exact statistics are not yet known. From early reports of just 28,000 deaths from Vioxx, some estimates put that number at 155,000.

Merck stock has continued to fall since the recall of Vioxx and no one is sure if the current stock price truly reflects the risk inherent in the stock. Evans also cut his target price by 10% today.

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