The AP's Linda Johnson has clearly read pages 37 to 43 of the SEC Form 10-K, filed yesterday, rather carefully.
Unlike some of her less-well informed colleagues, she has not proclaimed the end of the VIOXX® personal injury liabilities. She also astutely notes that criminal investigations, securities class action suits, and consumer fraud (in pricing) suits remain open and unresloved. Do go read the overnight item, in full, but here is a snippet:
. . . .Some plaintiffs chose not to participate in the settlement; about 355 plaintiff groups, some including multiple patients, still have their individual cases pending, according to the SEC filing. . . .
Merck also faces four Vioxx trials this year, two for product liability cases brought by patients who didn't participate in the settlement and two aimed at recovering costs related to use of the painkiller. . . .
And, from pages 37 to 43 of the Merck Form 10-K:
. . . .Separately, there are also still pending in various U.S. courts putative class actions purportedly brought on behalf of individual purchasers or users of Vioxx and seeking reimbursement of alleged economic loss. In the MDL proceeding, 33 such class actions remain. . . .
[A] Missouri state court certified a class of Missouri plaintiffs seeking reimbursement for out-of-pocket costs relating to Vioxx. The plaintiffs do not allege any personal injuries from taking Vioxx. . . . Trial has been set for April 11, 2011. In addition, in Indiana, plaintiffs have filed a motion to certify a class of Indiana Vioxx purchasers in a case pending before the Circuit Court of Marion County, Indiana; discovery in that case is ongoing. Briefing is complete on plaintiffs’ motion to certify a class of Kentucky Vioxx purchasers before the Circuit Court of Pike County, Kentucky. A hearing on this matter was held on February 26, 2010. . . .
As previously disclosed, Old Merck has received subpoenas from the DOJ requesting information related to Old Merck’s research, marketing and selling activities with respect to Vioxx in a federal health care investigation under criminal statutes. This investigation includes subpoenas for witnesses to appear before a grand jury. As previously disclosed, in March 2009, Old Merck received a letter from the U.S. Attorney’s Office for the District of Massachusetts identifying it as a target of the grand jury investigation regarding Vioxx. Further, as previously disclosed, investigations are being conducted by local authorities in certain cities in Europe in order to determine whether any criminal charges should be brought concerning Vioxx. The Company is cooperating with these governmental entities in their respective investigations (the “Vioxx Investigations”). The Company cannot predict the outcome of these inquiries; however, they could result in potential civil and/or criminal remedies.
In addition, Old Merck received a subpoena in September 2006 from the State of California Attorney General seeking documents and information related to the placement of Vioxx on California’s Medi-Cal formulary. The Company is cooperating with the Attorney General in responding to the subpoena. . . .
During 2009, Merck spent approximately $244 million in the aggregate in legal defense costs worldwide, including approximately $54 million in the fourth quarter of 2009, related to (i) the Vioxx Product Liability Lawsuits, (ii) the Vioxx Shareholder Lawsuits, (iii) the Vioxx Foreign Lawsuits, and (iv) the Vioxx Investigations. . . .
[A]s of December 31, 2009, the aggregate amount of the Vioxx Reserve was approximately $110 million, which is solely for future legal defense costs for the Vioxx Litigation. . . .
These individual trials -- and criminal investigations -- will quickly deplete the remaining $110 million of VIOXX designated reserves now held at Merck -- requiring that New Merck take additional charges for litigation defense -- in the coming quarters, and years. Should it be found liable in any of these actions or investigations, Merck will have to separately reserve, or pay for those damages. So, this will be a continuing drain on Merck's cash, and perhaps more importantly, its management's time, focus and attention. Now you know the rest of the story, here.