Interim Payments to Qualified Plaintiffs Expected to Start in August
WHITEHOUSE STATION, N.J.–(EMWNews)–Merck & Co., Inc. said today that it is satisfied that the thresholds
necessary to trigger funding of the program to resolve state and federal
VIOXX myocardial infarction (MI) and ischemic stroke (IS) claims in the
United States will be met. In fact, the Company expressed its confidence
that sufficient enrollments will be verified to exceed the participation
threshold requirements. More than 97 percent of eligible claimants now
have initiated enrollment in the program.
The Claims Administrator, BrownGreer PLC, continues to receive and
verify supporting documentation for some of these enrollments, but the
Company has already received releases from approximately 95 percent of
eligible claimants. The Company expects that the distribution of interim
payments to qualified claimants will begin in August and will continue
on a rolling basis until all claimants who qualify for an interim
payment are paid. Final payments will be made after all of the eligible
claims have been examined.
The Claims Administrator is reporting to U.S. District Court Judge Eldon
Fallon in New Orleans today that more than 48,500 of the approximately
50,000 individuals who have registered eligible injuries have enrolled
in the program and that the vast majority of enrolled individuals have
submitted releases and other materials for verification.
The parties continue to verify and correct the documentation on these
enrolled claims. When that process is completed, Merck is confident that
all participation threshold requirements provided in the Agreement will
be exceeded by wide margins. The thresholds are: (a) 85 percent or more
of all eligible myocardial infarction (MI) claims; (b) 85 percent or
more of all eligible ischemic stroke (IS) claims; (c) 85 percent or more
of all eligible claims claiming death as an injury; and (d) 85 percent
or more of all eligible claims alleging more than 12 months of use.
Enrolled claimants will not be eligible to have their claims evaluated
for possible payment until they have completed the submission of all
required documentation in proper form.
“This is an important milestone that shows the
resolution program is on track,” said Bruce N.
Kuhlik, executive vice president and general counsel of Merck. “Enough
claims have been verified for Merck to fund the program. All parties
continue to work hard in good faith on an orderly, documented and
objective process that examines each claim to determine if individuals
are qualified to receive a payment.”
Under the terms of the agreement, Merck could exercise a right to walk
away from the agreement if the thresholds and other requirements were
not met. The Company said that it would be waiving that right as of Aug.
4, 2008. The waiver of that right will trigger Merck’s
obligation to pay a fixed total of $4.85 billion. Payments will be made
in installments into the resolution fund, with the first payment of $500
million scheduled for Aug. 6, 2008. Additional payments will be made on
a periodic basis going forward, when and as needed to fund payments of
claims and administrative expenses.
Merck also announced that it expects the first interim payments under
the Agreement to commence before the end of August. The Claims
Administrator expects that before the end of August it will have
evaluated more than 2,500 individual claim packages submitted on behalf
of claimants qualified to receive interim payments under the resolution
program. This is sufficient to trigger the interim payment process as
provided in the Agreement.
Interim payments are expected to be authorized by the Claims
Administrator on a rolling basis to claimants alleging an MI injury or
sudden cardiac death who enrolled by the March 31, 2008 deadline for
those payments and whose claims have been found qualified for payment by
the Claims Administrator under the guidelines set forth in the
Agreement. Interim payments are calculated at 40 percent of the
then-currently estimated total final payment; the exact amounts of final
payments cannot be calculated until all claims have been processed.
Interim payments to qualified claimants alleging ischemic stroke will
follow beginning in or after February 2009. Final payments to qualified
claimants, including those who were not eligible for interim payments,
will be made after all claims have been processed. The Company’s
action today automatically extends to Oct. 30, 2008 the enrollment
deadline for eligible U.S. claimants who had lawsuits pending or tolling
agreements as of Nov. 9, 2007, which is the date the agreement was
In 2007, the Company recorded a pretax charge of $4.85 billion, which
represents the fixed amount to be paid by the Company to settle
This news release contains “forward-looking statements” as that term is
defined in the Private Securities Litigation Reform Act of 1995. These
statements are based on management’s current expectations and involve
risks and uncertainties, which may cause results to differ materially
from those set forth in the statements. The forward-looking statements
may include statements regarding product development, product potential
or financial performance. No forward-looking statement can be guaranteed
and actual results may differ materially from those projected. Merck
undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events, or
otherwise. Forward-looking statements in this news release should be
evaluated together with the many uncertainties that affect Merck’s
business, particularly those mentioned in the risk factors and
cautionary statements in Item 1A of Merck’s Form 10-K for the year ended
Dec. 31, 2007, and in any risk factors or cautionary statements
contained in the Company’s periodic reports on Form 10-Q or current
reports on Form 8-K, which the Company incorporates by reference.
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