Merck Updates Vioxx Legal Saga

Merck said its insurance policies provide for as much as $630 million -- after deductibles and co-insurance -- to cover the costs of defending product liability lawsuits and paying damages. Merck said it has about $190 million in insurance to cover liabilities of directors and officers named in securities and shareholder lawsuits. In addition, Merck has $275 million in insurance to deal with lawsuits related to company retirement plans.

"At this time, the company believes it is reasonably possible its insurance coverage with respect to the Vioxx lawsuits will not be adequate to cover its defense costs and any losses," Merck said.

Merck also has set aside $675 million in a reserve for the costs of defending itself in the Vioxx cases. It hasn't established a reserve for potential liabilities.

On Monday, Merck's stock was up 5 cents to $32.21.