$830 Million Settlement to Vioxx Investors

Pharmaceutical manufacturer, Merck & Co., has agreed to pay $830 million to settle a federal class action lawsuit brought by investors who claimed that the company misled them in regards to the safety of the painkiller, Vioxx. The company said the settlement will be paid out to investors who bought Merck stock between May 21, 1999 and October 29, 2004. Merck has also agreed to pay attorneys fees, but has not admitted to any liability or wrongdoing.

Vioxx, which debuted on U.S. markets in 1999, was a huge success for Merck until a 2004 colon-polyp prevention study revealed that the drug more than doubled a patient’s risk of heart attack or stroke after 18 months of use. After the study was published, thousands of Vioxx users filed suit against Merck claiming the drug harmed them. Merck pulled the drug off shelves in 2004. The company settled all Vioxx product liability suits in 2008 for $4.85 billion.

Merck has stated that its cash payment on the $830 million settlement will only amount to around $680 million, while the rest of the settlement will be paid by insurance policies. The settlement charge will be reflected in the company’s fourth quarter 2015 financial report. Merck still faces several securities suits from individual investors who opted out of the class action.

The case is: Merck & Co. Inc. Securities Litigation, MDL-1658, U.S. District Court, District of New Jersey (Newark).

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