Merck refuses to settle Vioxx recall lawsuits out of court

As everyone who is following the Vioxx recall story waits for the US Food & Drug Administration (FDA) to come up with its decision on marketing of Cox-2 drugs in the US, the legal process goes on. A FDA panel had recommended in February that Vioxx be allowed to resume sales in the US while Celebrex and Bextra stay on the market, though all drugs carry a black box warning. The recommendations have come under doubt because several members of the panel that made these recommendations also benefited financially from drugmakers Pfizer and Merck. (Related article: FDA should have disclosed conflicts of interest of panel members)

Analysts expect that FDA, which is virtually under control of the pharmaceutical companies, is likely to rule in favor of drug companies as it has done in the cases of Adderall, Crestor, Cylert, Ritalin, Natrecor, Avonex, Paxil, Avandamet, Elidel, Protopic, etc.

So how is Merck approaching Vioxx litigation? So far Merck has been very aggressive in its approach and is essentially hoping that if it can make it extremely hard for some of the initial plaintiffs to prove that Vioxx, and not something else, caused their heart problems, it can discourage other Vioxx victims to go to court. This is also the reason that Merck has flatly refused to settle out of court.

In a recent interview with Porus P. Cooper of The Philadelphia Inquirer, Kenneth C. Frazier, who runs Merck's legal department, also ruled out following in the footsteps of Wyeth, that set up a trust fund to compensate victims of fen-phen. It is important to note that Vioxx class action lawsuits already are estimated to be the biggest ever in the history of the United States, surpassing that for fen-phen. Vioxx liabilities are estimated to be as much as $55 billion leading many analysts to speculate that Merck will eventually be driven into bankruptcy.

The recommendations of the FDA panel may be of some help to Merck in arguing that a panel of experts did see value in Vioxx, though Vioxx attorneys are expected to argue that due to conflicts of interest that recommendation should be discarded. Any reasonable juror is unlikely to believe experts who had financial ties to the drugmakers and then were recommending that the drugs are safe. (Related article: Merck has a weak defense in Vioxx lawsuits)

Apart from hundreds of lawsuits already filed against Merck, the company faces other challenges. Its insurance providers want to abandon the company. At the same time, it faces securities related lawsuits, investigations by DOJ and SEC, and finally more lawsuits from health plans.

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