Merck & Co. Inc. said Friday it will pay $4.85 billion US to settle thousands of lawsuits in the United States over its anti-inflammatory painkillerVioxx.
The New Jersey-based company faces about 26,600 lawsuits covering 47,000 plaintiffs, plus about 265 potential class action cases.The suits were launched by people who claimed that usingVioxx contributed toheart disease or stroke.
Ina release issued before the opening of North American stock markets, Merck said the money is not a class-action settlement and claims will be evaluated on an individual basis.
Investors reacted by sending Merck shares up $1.13 US to close at $55.90 US on the NYSE.
The agreement applies only to legal residents of the United States and those who allege that they suffered aheart attackor stroke in the U.S.
A condition of the settlement becoming binding is that 85 per cent of all plantiffs must agree to drop their claims.
The agreement was signed by the company and lawyers for the plantiffs early Friday morning after they met with three of the four judges co-ordinating more than 95 per cent of the Vioxx lawsuits.
As part of the deal, Merck would not have to admit cause or fault.
Merck voluntarily withdrew Vioxx from the marketplace on Sept. 30, 2004.
The company said it will book a $4.85-billion US charge in its fourth quarter to cover the cost of the settlement.
"This agreement also makes sense for the company because, since 2004, we have reserved approximately $1.9 billion US for defending Vioxx litigation and, absent this agreement, could anticipate that the litigation might stretch on for years," said Bruce Kuhlik, Merck's senior vice-president and general counsel, in a statement.
A Canadian lawyer handling 300 Vioxx cases from across the country said heexpects that Merckwill quickly seek to settle all of itscases in Canada.
"We are prepared to fight these cases patient by patient, case by case" if a settlement is not forthcoming, Greg Monforton said.