For Merck, Hindsight Hurts

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Even after dragging its feet for years, one has to wonder if Merck (NYSE: MRK) settled the Vioxx cases a little too quickly?

Hindsight is always 20/20, but a lot has happened since the company settled with plaintiffs for $4.85 billion last November:

  • Yesterday it won one-and-a-half cases on appeal. A Texas court overturned a $26 million verdict and a New Jersey court set aside $9 million of a $13.9 million award.

  • Of the Vioxx cases that have gone to court, Merck now has 11 wins and three losses, including the $7.75 million award overturned two weeks ago.

  • In a case against Medtronic (NYSE: MDT), the Supreme Court said that plantiffs can't sue medical-device makers if the device is approved by the FDA, implying that the FDA approval standards aren't strict enough. Pharmaceutcial company Wyeth (NYSE: WYE) has a similar case pending with the Supreme Court. If the Supreme Court rules in Wyeth's favor, plantiffs also can't sue drugmakers with FDA approval for similar reasons.

Clearly, trying to fight the 60,000-odd lawsuits would have been impossible, but if it had waited until after the three verdicts were overturned and the Wyeth case was decided to settle the case, it might have been in a better bargaining position.

The overturned verdicts will likely encourage some plaintiffs that were going to go to trial to join the settlement. That might seem like a bad thing for Merck, but it'll still likely pay less for those cases than if the plaintiff rolled the dice and went to court based on Merck's current record.

The Vioxx saga seems to be never-ending, but at least things appear to be progressing in the right direction. Now if it and Schering-Plough (NYSE: SGP) could get their issues with Vytorin worked out, the drugmaker would really be doing well.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.

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  • Report this Comment On June 15, 2008, at 12:26 AM, badbonehealing wrote:

    NOPE

    MERCK settled just in the NICK of time. If they had not before the newest set of "product problems" came to light, had they not settled before this (and it is) making a laughing stock of Merck to the public (future jurors), had they not settled BEFORE the planned 250+ cases were to be REMANDED back to the states AND had the much protected TRIAL PACKAGE sent with the cases back to the states...and more...had they not, 2008 would have been just an absolutely devastating year....they planned, each and every day, when to settle - knowing what was behind them and in front of them....and they did so at a majestic time in view of how CHEAPLY EVERYONE KNOWS THEY GOT AWAY WITH THIS private settlement deal - which, especially with all of the above and more, is likley going to be "revisited"...

    SO MUCH MORE, just a bit...

    Looming MAJOR (alleged) problems with FOSAMAX.

    A "settlement" that is still being challenged, and (my view) will still cost Merck another $5B

    MORE shoddy (alleged) products which just keep making profit which will be needed to fund long term litigation (which I believe is Merck's plan - but has gone awry).

    Merck settlements were more luck and the impact of psychology of a "settlement deal" that will run into trouble.

    A public disdain for Merck - which is gaining momentum as inreasing problems - and the same old allegations - with other products come to light - there are likely patterns here...

    A physician community that begins to revolt against even, yes even their own clients as those same clients - the ones brave enough - ask for a MERCK PRODUCT - and the physician at first recoils a bit.

    Physicians that now know that they just cannot trust Merck Sales Reps.

    OH - and do a bit of googling on

    "vioxx bone spine repair"

    "cox-2 inhibitor spine repair"

    "vioxx Harrison Exhibits"

    and maybe get a peek into their "alletged..." voodoo approach to bone and spine repair and regeneration "techniques"..

    I'll have to stop here as this will just get too long...

    Dennis Harrison

    MBA – BGS

    Vioxx VICTIMS - I am more than a bit confident of your disgust with the settlement, your (likely) rights of representation being - let's say, questinable...and how you have been "boxed in" to the agreement while your continued - appropriate - litigation has been "boxed out"...

    Keep reading if you are a Plaintiff and want to FINALLY feel that you are NOT ALONE...

    Are you also one of the disgusted, confused, and worse...litigants who feel that you have been boxed in to the MERCK "settlement" - and there are many ways.... Are you really hoping to find some compassionate individuals to dialogue with, an especially those in a similar or exact situation. then read on....

    Vioxx Settlement - a group to relate to...heart - mi - stroke - bone - spine

    ….

    There is a VIOXX EDUCATION PLAINTIFF EDUCATION GROUP (VPEG) for Vioxx Plaintiffs (now 340 and growing people). Regardless of the “settlement” official position - "things are not as they always appear...", the group REMAINS very, very relative and is gaining increasing “name brand recognition”. VPEG concerns, etc., need to be dealt with, and VPEG is becoming one of the lynchpins in converting a very unfair private settlement to what it should be…

    VIOXX victims - we know you shall gain no comfort with the arrogant anti civil right violation HAWKS, also apparently MANY of your attorneys, and certainly not Merck… but there is a group of individuals in a similar situation and KNOW what you are going through. In some ways they are on the leading edge of knowing what the heck is going on and how Vioxx is being used by the MASS TORT LITIGATION REFORM hawsks who wish to pound the MASS TORT system to the ground, without a care in he world of legal fairness or your legal rights.

    Whether - whether an "opt-in" who was also "boxed-in" -or- and "opt-out" who Merck is trying to "box-out"; if you are a vIOXX Plaintiff and wish to become part of a dialogue of nearly 350 individuals and growing, WHO CERTAINLY HAVE NOT GIVEN UP and are a bunch of decent, compassionate, human beings - all damaged by (allegedly…) Merck, in the VIOXX debacle...if you are a Plainitiff feel free to submit a request to join the VIOXX PLAINTIFF EDUCATION GROUP (VPEG) - at:

    http://groups.yahoo.com/group/MerckSettlement/

    Dennis Harrison

    MBA – BGS

    p.s. – there is another, active litigation case in re to (alleged…) bone and spine healing problems - another group will be set up in June for that specific issue. It is not directly affiliated with this one, but will be started by one of the members (name above) who has been actively involved in the allegations of bone and spine problems (not a lawyer, but a pro se litigant). What is important to note that VPEG is increasingly aware of not only the major unfairness of the private “settlement”, a great place to dialogue and find people in your situation, but also seeks synergies with other (alleged…) shoddiness within Vioxx and across Merck “product” lines – (alleged…) patterns and CONSISTENCIES of MERCK’s behavior are becoming increasingly known and relevant…

    http://groups.yahoo.com/group/MerckSettlement/

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