Merck & Co. has agreed to pay $12.15 million in plaintiffs’ legal fees to settle two shareholder derivative suits over its painkiller Vioxx — one in state court in New Jersey and the other in the 3rd U.S. Circuit Court of Appeals.
The suits charged the Whitehouse Station, N.J., manufacturer’s current and former directors and officers with breaches of their fiduciary duty in connection with the promotion of Vioxx despite evidence that it caused heart problems.
As part of the settlement, Merck agreed to create two committees to address product safety. One would identify and address risks that could impact customers and require immediate action. The other would draft and implement procedures to monitor the safety of drugs marketed or studied by the company and would establish and publicize internally procedures by which employees can raise concerns about drug safety.
The settlement also calls for Merck to appoint a chief medical officer, who would work to establish procedures addressing product safety issues; and ensure registration of clinical trials and submission of results to a federal registry and databank, as mandated by the Food and Drug Administration Amendments Act of 2007. The company must adopt and publicize on its intranet its procedures for compliance with the act with respect to the clinical trial registry. And Merck will retain an independent third party to monitor compliance.
“We believe the reforms negotiated here are substantial. They will prevent this sort of thing from happening again and thereby protect the corporation against the abuses of what happened during Vioxx,” says Peter Pearlman of Cohn, Lifland, Pearlman, Herrmann & Knopf in Saddle Brook, N.J., who represented the federal plaintiffs. “We’d be happy if this had never happened, but we’re satisfied that this is a good result for the company.”