Merck settling Vioxx claims for $4.85B

Merck's fight-'em-hard strategy for Vioxx lawsuits may have been part of a larger plan to persuade thousands of plaintiffs to make a deal. After winning most of the 20 suits it defended in court, the drug giant now is set to announce that it's settled 27,000 suits covering some 47,000 plaintiffs.

The $4.85 billion settlement isn't a small token of apology--it's one of the biggest ever in civil litigation--but it's a far cry from the $25 billion once bandied about as Merck's potential liability. And considering that the company has paid more than $1.2 billion in Vioxx-related legal fees, it could end up as a bargain. Plus, the deal will lay to rest lingering doubts about Merck's long-term financial viability. When there's a $25 billion anvil overhead, investors can get queasy.

Merck still faces criminal and civil investigations in several states and at the Justice Department. And for this new deal to become binding, 85 percent of the plaintiffs involved will have to accept it.

Token background: Merck pulled Vioxx in 2004 after a study showed the arthritis med increased the risk of heart attack and stroke. But by that time, Merck scientists had been worried about the drug for several years, and when news of those worries hit the papers, lawsuits started flying.

- check out the news release from Merck
- read the report from The New York Times

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