Ever since the flood of Vioxx lawsuits arrived in courts around the country, there was an expectation that Merck would eventually settle, despite a oft-repeated strategy of fighting every case. Liability estimates went as high as $50 billion. But over the past two years, Merck racked up mostly victories in courtrooms and now, sensing opportunity, has reached a $4.85 billion settlement. But is it a good one? We chatted with Ben Zipursky, a mass torts expert and professor at Fordham University School of Law, who has followed the Vioxx litigation since it began.

Pharmalot: Is Merck getting off cheap?
Zipursky: Well, if they don’t settle, it could be more than a decade without a settlement. So if you take the potential exposure and the litigation expenses (reserves total $1.9 billion), taken together, it looks good for Merck. For them, it’s affordable. They’ve racked up a good record in court, so maybe if they fought hard for another couple of years, they’d face less liability, but I don’t know. Let’s put it this way, it’s a good gamble.

Pharmalot: Well, Wall Street certainly thinks so. Merck’s stock is up smartly today.
Zipurksy: Merck is being rewarded for taking a tough stance early on and sticking with it.

Pharmalot: Where are the weaknesses in this deal?
Zipursky: For one, look at the stipulation that says lawyers have to recommend this to their clients. They’re obligated to push the settlement. That conflicts with the obligation to do what’s best for the client. Why does this matter? Well, different people find different ways to go to court and challenge the validity of a settlement. Usually, that would be easier in a class action, and this isn’t a class action. But something that has a legally questionable provision can turn out to be a problem for everyone who is party to the agreement.

Pharmalot: Why do you think the timing was right for a settlement?
Zipursky: First, they had a perfect right not to pursue a settlement until now. But they did so for financial and public relations reasons, as much as, if not for more than, a sense of responsibility. It’s prudent to settle it - it will satisfy lawyers and clients who may have waiting an extended period before going to court and receiving any payment, should they have won. So on that basis, they deserve to get a PR boost.

Pharmalot: How does this differ from Wyeth’s fen-phen settlement?
Zipursky: There were a few differences. It was structured differently with opt-out provisions, which became difficult for the company. And there were a relatively small number of cases which were much stronger than many others, because of the severity of the underlying health issues. And there was a latency issue - the diet pills caused an injury that were, sometimes, not detected for some amount of time. So these factors caused issues for the company. With Vioxx, there was a defined period in which an injury would occur. And there are no opt-outs.

Pharmalot: So if enough plaintiffs participate and Merck reaches the 85 percent threshhold, is this it?
Zipursky: No, actually, this only applies to US plaintiffs, although they represent the majority of Vioxx users. And this only pertains to product liability lawsuits. There are still state governments that have sued Merck. And the company faces government probes. So, no, this won’t end it all. But it is a very large piece.