Merck to Fund U.S. VIOXX(R) Product Liability Resolution Program

2008-07-17 07:00:00

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 Mercks

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 Companys

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

qualifying claims.

Forward-Looking Statement

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.

Merck & Co., Inc.
Casey Stavropoulos, 202-247-0705

Caouette, 908-423-3461
Eva Boratto,

Michael Nally, 908-423-4465

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