Adds $295 Million To Vioxx Legal Defense Fund For Trials Through 2007
A January 31, 2006 press release issued by Merck & Co. states that 9,650 Vioxx lawsuits had been filed against the company as of December 31, 2005.
In a January 31 article, Theresa Agovino, of the Associated Press (AP), reported that Merck has reserved an additional $295 million for its Vioxx legal defense costs. This additional $295 means that Merck, to date, has designated a total of $970 million for the legal costs associated with the thousands of Vioxx cases filed against the company.
Of that total amount, Merck said in the January 31 press release it had spent $285 million on defenses costs in 2005. Notably, only three Vioxx cases went to trial in 2005. This leaves in Merck's Vioxx defense fund $685 million, an amount which, according to the AP article, Merck believes will be sufficient to pay for its Vioxx legal costs through 2007.
In a February 1, 2006 article in The Wall Street Journal, Peter Loftis reported that "[Merck] hasn't yet made reserves for damages it may have to pay in the cases, saying it is too early to estimate such costs."
In 2006 numerous Vioxx lawsuits are scheduled to go to trial in the federal court MDL litigation as well as some state court systems. Significantly, some of these Vioxx trials are scheduled such that more than one case will be proceeding at the same time. Accordingly, in 2006 and going forward, Merck will likely find itself in the situation where the company is forced to deploy separate defense counsel teams to different venues, and transport its corporate witnesses from courtroom to courtroom. This scenario may mean that Merck will need to set aside additional Vioxx legal defense funds sooner than 2007.
(Posted by: Tom Lamb)