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Merck's Vioxx Settlement Sends a Warning to Consumers

Merck's Vioxx Settlement Sends a Warning to Consumers

Merck's Vioxx settlement for $5 billion is seen as a victory for the drug company.

November 11, 2007 —

Is it really possible for a $5 billion settlement to be a victory for a drug company?  It may seem unlikely, but analysts view Merck’s recent settlement over Vioxx as a big win.  Such analysis raises serious concerns for consumers who now must fear that drug companies may be willing to place unsafe products in the marketplace and deal with the consequences later.

When Vioxx was pulled by Merck in 2004, the company asserted that the drug was safe and any problems were isolated incidents.  Though clinical trials proved that the drug had increased the likelihood of heart attacks and strokes, it remains difficult to prove that Vioxx directly led to death of any individual.  When the litigation began in 2005, most analysts believed Merck would pay about $25 billion in damages, but then Merck began winning the cases.  When the settlement was announced, Dr. Eric Topol, who in 2001 was among the first to point out the dangers of Vioxx, said, “I think they’ve gotten off quite easily, frankly, for the problems they’ve engendered.”

The $4.85 billion settlement accounts for roughly nine months profit for the drug giant and Merck’s stock rose 2.3 percent after the settlement was announced.  Some lawyers asserted that Merck’s strategy of contesting every lawsuit and agreeing to a blanket settlement may encourage other drug companies to do the same in the future. 

The settlement is a clear warning to consumers that Merck—and potentially other drug makers—are more than willing to fight claims that their products cause health problems. 

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