Vioxx Lawsuits Swamp Merck

Updated from 2:49 p.m. EST

Merck (MRK) Tuesday said that 475 personal injury lawsuits have been filed against the company relating to its withdrawal of Vioxx from the market on Sept. 30.

Kenneth C. Frazier, senior vice president and general counsel, said the company will vigorously defend against the lawsuits, seeking to try the lawsuits on a case-by-case basis because each patient taking the drug has a different set of circumstances and medical conditions.

Frazier told analysts Tuesday that the product liability cases include 1,100 plaintiff groups. Forty percent of the cases have been filed in federal court; 60% have been filed in state court. Frazier said Merck will try to have all cases moved to federal court. The lawsuit data are through Nov. 30, representing an increase of 100 cases from Oct. 31.

"The company believes these are individual cases," said Frazier, noting that the company will oppose efforts to combine individual suits into class-action suits. "The cases turn on such individual differences."

He wouldn't comment on litigation cost estimates, telling analysts that they have to view the claims "with a critical eye." Analysts' estimates on Vioxx's liability have gone as high as $55 billion, although many analysts have kept their estimates under $20 billion.

Frazier said the company hasn't identified a potential litigation reserve "because it is too early to estimate it now." Frazier didn't set a timetable for evaluating a reserve.

"We believe these cases are defensible," he said. "The company has acted responsibly and appropriately." He said the first personal injury trial should begin during the first half of 2005 in Texas or Alabama.

Frazier said there are 18 other lawsuits as of Dec. 9 relating to shareholder claims and class-action lawsuits alleging securities law violations. Another 10 lawsuits have been filed under the federal law-governing savings plan such as 401(k) programs.

Merck's handling of Vioxx is the subject of a criminal investigation by the Justice Department, congressional hearings and what the company says is an "informal inquiry" by the Securities and Exchange Commission.