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Merck pays USD 4.9bn to put Vioxx to bed

Merck & Co offers USD 4.9bn in a deal which would allow the company to settle more than 95 per cent of lawsuits over its anti-inflammatory drug Vioxx

Merck & Co has offered USD 4.9bn in a deal which would allow the company to settle more than 95 per cent of lawsuits over its anti-inflammatory drug, Vioxx (rofecoxib).

The US-based company has faced tens of thousands of suits over Vioxx, which the company withdrew from sale on international markets in September 2004, after an internal study revealed the drug doubled the risks of heart attack in patients taking the medication for 18 months or more.

Merck & Co will set up two funds, one with USD 4bn for claims of heart problems and another for USD 850m for ischemic stroke claims. Claims were to be reviewed on an individual basis, Merck revealed, stressing that this was not a class-action settlement.

Merck also stated that the agreement did not represent any admission of liability on its part, despite previous statements saying that it would fight more than 27,000 lawsuits.

Merck will continue to fight all claims that are not included in the resolution process, the company said. The company had argued that it properly disclosed all potential risks attached to prolonged use of Vioxx.

"This is a good and responsible agreement that will allow the company to concentrate even more fully on its mission of discovering, developing and delivering novel medicines and vaccines," Merck & Co's CEO Richard Clark said in a statement.

Merck & Co's shares rose 2.1 per cent to reach USD 55.90 on the news.

Standard & Poor analysts said that the agreement significantly diminished a major uncertainty facing Merck & Co, and the proposed settlement amount was well within Merck & Co's ability to fund without significantly weakening its very strong financial profile.

30th September 2008

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