The risks of women developing a blood clot while using certain contraceptives are well known and have spawned thousands of lawsuits and resulted in billions of dollars in payments. Now it is Merck's ($MRK) turn to pony up, with a $100 million settlement that some say lets it off cheap.
The New Jersey drugmaker is prepared to make the payment to settle 1,700 lawsuits tied to its NuvaRing contraceptive device, Bloomberg reports, first citing sources and then a judge's comment in a hearing today. While a $100 million settlement averages out to more than $58,000 a claim, the product earned it $686 million last year, according to its recent earnings report. It's also a fraction of what Bayer has laid out to settle lawsuits over its Yaz and Yasmin products, Bloomberg points out. The German drugmaker has reported having spent more than $1.6 billion over the years to resolve litigation over the contraceptives. In 2012, it agreed to pay $110 million to settle the first 500 of 11,000 lawsuit, which meant an average payout of about $220,000. But then Bayer's birth control products earn it more than $1 billion a year.
"Merck may be getting out much more cheaply than its competitors because proving the liability case against the NuvaRing device appears to be more difficult than against the other contraceptives," Carl Tobias, who teaches liability law at the University of Richmond in Virginia, told Bloomberg.
NuvaRing, which combines estrogen and progestin, was among products named in a 2011 FDA study about increased risks of blood clots. The study found that women using NuvaRing, as well as women using Johnson & Johnson's ($JNJ) patch, Ortho Evra, and Bayer's Yaz and Yasmin pills were at a higher risk of developing blood clots than women using older versions of birth control pills. The lawsuits accuse Merck of selling NuvaRing knowing that the risks were higher than for some other products on the market.
Because contraceptives are so widely used, their risks generate a lot of interest. Just last year, France's drug regulator yanked Bayer's contraceptive Diane-35 off the market and insisted the European Medicines Agency investigate its off-label use as an acne treatment and its risk of blood clots. The EMA did that and came back in support of the drug, even for the off-label use, leading France to reverse its position.