Merck Progress Report on Enrollment in Program to Resolve U.S. VIOXX® Product Liability Lawsuits
More than 49,000 Claimants Initiated Enrollment for Interim Payments
WHITEHOUSE STATION, N.J.--(BUSINESS WIRE)--Merck & Co., Inc. today said that more than 44,000 of the approximately 47,000 individuals who registered eligible injuries have submitted some or all of the materials required for enrollment that could qualify them for an interim payment in the program to resolve state and federal myocardial infarction (MI) and ischemic stroke (IS) claims filed against the Company in the United States. If all of these eligible submissions are completed in accordance with the Settlement Agreement, this would represent more than 93 percent of the eligible MI and IS claims previously registered with the program. In addition, approximately 5,000 other claimants have also sought to enroll and their eligibility status still has to be determined.
“We are now working with the Claims Administrator to examine the registration and enrollment materials that have been received and continue to come in. There is a considerable amount of documentation that has to be reviewed before the definitive determination can be made that the thresholds have been met.”
As of Feb. 29, the Claims Administrator reports more than 27,750 eligible MI claimants have initiated enrollment, more than 16,000 eligible IS claimants have initiated enrollment, more than 5,500 eligible MI and IS claimants alleging death as an injury have initiated enrollment, and more than 26,500 eligible MI and IS claimants alleging more than 12 months of use have initiated enrollment. Each of these numbers appears to represent at least 93 percent of the eligible claims in each category. These numbers do not include the additional 5,000 enrollees whose eligibility has yet to be determined.
“We are very pleased with the large number of enrollments we are seeing and are confident that when the enrollments are verified, all 85 percent thresholds will be met and exceeded within the timeframes in the agreement,” said Ted Mayer, of Hughes Hubbard & Reed, one of Merck's coordinating defense counsel. “We are now working with the Claims Administrator to examine the registration and enrollment materials that have been received and continue to come in. There is a considerable amount of documentation that has to be reviewed before the definitive determination can be made that the thresholds have been met.”
The timely meeting of the thresholds with enrollment documents in compliance with the Settlement Agreement would obligate Merck to pay $4.85 billion in installments into the resolution fund.
The thresholds are: (a) 85 percent or more of all eligible MI claims; (b) 85 percent or more of all eligible IS claims; (c) 85 percent or more of all eligible claims claiming death as an injury; and (d) 85 percent or more of all eligible claims alleging more than 12 months of use.
Claimants Eligible for Interim Payments
Under the Nov. 9, 2007 agreement, U.S. claimants who enroll in the resolution program by Feb. 29, are eligible to receive an interim payment, provided the claim ultimately qualifies for payment.
In recent weeks, several plaintiffs’ firms reported that a substantial number of claimants who wanted to enroll needed additional time to submit complete enrollment packages. As a result, the Company and the plaintiffs’ firms decided that claimants who have submitted initial submissions by Feb. 29 will receive a 31-day grace period, ending March 31, to complete their enrollment submissions with additional documentation, including properly executed releases and medical record authorization forms.
Provided the submissions are completed and verified, and participation thresholds are reached in a timely manner, those claimants will be eligible for interim payments, starting as early as August.
Under the settlement agreement, Merck does not admit causation or fault with respect to these claims.
Merck Confirms that Eligible Claimants Can Still Enroll in Resolution Program
Eligible claimants who do not qualify for interim payments may still enroll in the resolution program if the claims were filed or tolled prior to Nov. 9, 2007 and their claims will be counted toward the participation thresholds as provided by the agreements. If participation thresholds are met in a timely manner, claimants will be able to enroll in the program through Oct. 30.
Criteria Under the Agreement
The resolution program is open only to U.S. legal residents and claimants whose alleged injury occurred in the United States.
To qualify for a payment, claimants also must satisfy three eligibility gates: 1) an injury gate requiring objective, medical proof of MI or IS (as defined in the agreement); 2) a duration gate based on documented receipt of at least 30 VIOXX pills; and 3) a proximity gate requiring receipt of pills in sufficient number and proximity to the event to support a presumption of ingestion of VIOXX within 14 days before the claimed injury.
Claimants who satisfy the eligibility gates will have their claims further evaluated by the Claims Administrator, who will make an objective evaluation of documented medical injuries and specific risk factors. This evaluation will be the basis for determining the amount to be paid to each claimant.
The Company recorded a fourth-quarter 2007 pre-tax charge in the amount of $4.85 billion to cover the cost of the agreement.
The Company will continue to defend all claims that are not included in the resolution program.
Status of Litigation
Juries had decided in favor of the Company 12 times and in plaintiffs’ favor five times. One Merck verdict was set aside by the court and has not been retried. Another Merck verdict was set aside and retried, leading to one of the five plaintiff verdicts. There have been two unresolved mistrials.
As of Dec. 31, 2007, in the United States, the Company had been served or was aware that it had been named as a defendant in approximately 26,500 lawsuits, which include approximately 47,275 plaintiff groups alleging personal injuries resulting from the use of VIOXX, and in approximately 262 putative class actions alleging personal injuries and/or economic loss.
Merck entered into a tolling agreement with the multidistrict litigation Plaintiffs’ Steering Committee that established a procedure to halt the running of the statute of limitations for certain categories of claims allegedly arising from the use of VIOXX by non-New Jersey citizens. The Tolling Agreement required any tolled claims to be filed in federal court. As of Dec. 31, 2007, approximately 13,230 claimants had entered into Tolling Agreements. The parties agreed that April 9, 2007, was the deadline for filing Tolling Agreements and no additional Tolling Agreements are being accepted.
The claims of over 6,350 plaintiff groups had been dismissed as of Dec. 31, 2007. In addition, about 20 cases scheduled for trial were either dismissed or withdrawn from the trial calendar by plaintiffs before a jury could be selected.
This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding product development, product potential or financial performance. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the many uncertainties that affect Merck's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of Merck's Form 10-K for the year ended Dec. 31, 2007, and in its periodic reports on Form 10-Q and current reports on Form 8-K, if any, which the Company incorporates by reference.