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While touted as a virtual end to Vioxx litigation, the recent $4.85 billion settlement struck by Merck & Co. Inc. to resolve products liability claims does not get the pharmaceutical giant out of the woods. In reality, a number of lawsuits are still pending against Merck in both state and federal courts around the country. Other pending Vioxx actions include: suits brought by attorneys general in four states to recover Medicaid funds they paid for the drug; third-payor lawsuits filed by insurance companies; securities class actions brought against the directors on behalf of shareholders; and stock loss class actions on behalf of Merck’s employees and unions. Houston-based plaintiffs’ attorney Mark Lanier � who has tried three major Vioxx cases in the United States � noted that there are also foreign cases being filed in Germany, Israel and London. Lanier, of the W. Mark Lanier Law Firm in Houston, is a consultant on the German cases and estimates there could be several thousand. If that wasn’t enough, the settlement, which includes attorney fees, must be approved by 85% of stroke and heart attack victims � and that’s hardly a done deal. Merck referred calls to its public realtions consultant, APCO Worldwide Inc. New Orleans attorney Russ Herman, chairman of the plaintiffs’ negotiating team and liaison to the multidistrict litigation panel that dealt with the settlement, said he expects the settlement to be “overwhelmingly approved. “We are getting a lot of questions [from attorneys], but overall the reception has been 90% positive,” said Herman of New Orleans’ Herman, Herman, Katz & Cotlar. The fight continues Ted Mayer, of New York’s Hughes Hubbard & Reed, lead defense counsel for Merck, said of the other litigation: “We continue to fight on other fronts and defend other cases vigorously.” He added that Merck has already retained lawyers in Germany, Israel and England to defend the foreign cases. His estimate of pending foreigh cases is much lower than Lanier’s. Mayer placed the total at “fewer than 300. “In non-U.S. jurisdictions, the law is different,” he said. “They are at different stages and they are different systems. The assessment of damages are different.” The large variety of class actions that have been filed against Merck is not unusual, legal experts note. It happened with Fen-phen, asbestos, breast implants, Ephedra and Baycol. “Anytime there’s a controversy over the safety of the product, you can get a variety of lawsuits,” said Richard A. Nagareda, a professor at Vanderbilt University Law School and author of a book on mass torts. “You are seeing efforts to expand what is fundamentally a tort controversy into a different cubbyhole because it enhances lawyers’ chances of getting the class certified.” Merck pulled Vioxx, a drug that was prescribed for muscle spasm and inflammation, from the market in 2004 following reports of strokes and heart attacks. Since then, plaintiffs’ lawyers have filed a slew of lawsuits using a variety of legal theories in different courts around the country. To put out the fires, Merck hired Hughes Hubbard and Washington-based Williams & Connolly as co-lead counsel. The defense team also includes O’Melveny & Myers, Bartlit Beck Herman Palenchar & Scott of Chicago and Dechert. Hughes Hubbard hired Washington-based APCO to handle its public relations and damage control. Merck has set aside $1.9 billion for legal fees, according to Kent Jarrell of APCO. Most of the products liability suits are in four consolidated cases � the federal New Orleans case and three state court cases in California, New Jersey and Texas. Judges in all four cases helped craft the settlement, which would apply to plaintiffs in all four if an agreement is reached. The settlement “is a step in the right direction,” said John Ruiz, a Miami attorney who handles 1,200 Vioxx cases nationally. “At least we are putting money into the hands of those injured rather than in the hands of defense counsel.” Merck’s defense team carefully studied other major products liability cases such as Fen-phen, Baycol and Ephedra to “learn what was done right and what was done wrong, and apply that to our own unique case,” Jarrell said. What is unusual about the Merck proposed settlement is that it caps damages � which Nagareda called a smart move for the company. “The important thing is it’s a fixed sum,” he said. “The price tag is fixed. I know that they looked very, very carefully at prior settlements.” Litigators said Merck would do well to avoid the pitfalls that befell Fen-phen. “It was tantamount to a disaster,” said Ruiz, who had 1,000 Fen-phen cases. “I still have cases that haven’t been compensated. They would lose EKG reports, medical reports, they would put the wrong number on files. The claims administrator changed a couple times.” But Lanier said Merck’s massive settlement is far from resolved. “I have another three or four months before I’m convinced this settlement will happen,” he said. “But this is a significant corner. Merck never put money on the table in any case dealing with Vioxx. If this case is settled, the other cases will by and large find resolution.” Plaintiffs’ lawyers filed Vioxx product sliability cases in New Jersey because Merck is based there and in other states if a Merck employee or a pharmacy that dispensed the drug was based there. Consumer fraud class actions have been brought in Illinois, Kansas and Missouri by former users seeking to be reimbursed for out-of-pocket prescription costs. Additionally, class actions were brought by attorneys general in Alaska, Louisiana, Mississippi, Montana, New York, Texas and Utah seeking repayment of Medicaid funds for Vioxx prescriptions. Along the same lines, third-party payor suits have been filed by insurance companies seeking reimbursement for prescription costs. Securities suits were also brought by shareholders in Oregon state court and New Jersey federal and state courts. Some of the suits target the board of directors for allegedly knowing about problems with Vioxx and failing to take action. Finally, suits have been brought by Merck employees and unions trying to get compensated for the hits to their retirement accounts brought about by the stock nosedive when reports about Vioxx first surfaced in 2004. The stock has since rebounded. On the criminal front, Merck has been under investigation by the Department of Justice, as part of a federal health care investigation, over its research, marketing and sales activities related to Vioxx. It is also under criminal investigations by the DOJ and the Texas attorney general related to other drugs, according to the company’s SEC filings from 2004.

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