Merck will pay $4.85 billion to settle the nearly 27,000 Vioxx lawsuits filed against the company by persons or family members claiming the drug injured or caused the death of its users.
“This is a good and responsible agreement that will allow the company to concentrate even more fully on its mission of discovering, developing and delivering novel medicines and vaccines,” CEO Richard Clark said in a statement.
Under terms of the agreement, Merck will establish two funds, a $4 billion one for claims of myocardial infarction and a $850 million one for ischemic stroke claims.
Amounts awarded to individual plaintiffs will vary.
As part of the deal, Merck does not admit fault or causation and will continue to defend all claims that are not included in the resolution process.
Since Vioxx was withdrawn in September 2004, due to cardiovascular concerns, Merck has won 11 cases that have gone to trial and lost five.
Barbara Ryan, a health care analyst at Deutsche Bank, applauded the deal, stating Merck may essentially emerge from the Vioxx situation without breaking the bank.
In a note to investors, Ryan wrote to that Merck's "aggressive and successful defense strategy has given it a heavy hand in the bargaining process" with the cost of the settlements at the low end of expectations.