(CBS/AP) Merck & Co. will pay $4.85 billion to settle thousands of lawsuits in one of the largest civil cases ever, the company said Friday.
Merck faced about 26,600 lawsuits representing 47,000 plaintiffs, plus about 265 potential class action cases, filed by people or family members who claimed the drug Vioxx proved fatal or injured its users. The agreement is to cover cases filed in federal and state courts.
This settlement will be formally filed in federal court in New Orleans, reports CBS News correspondent Barry Bagnato.
The deal becomes binding only if 85 percent of all plaintiffs agree to drop their cases. It was finalized in the early morning hours after attorneys for Merck and the plaintiffs met with three of the four judges overseeing nearly all Vioxx claims.
Merck could put the uncertainty of millions of dollars in possible settlements that have plagued the pharmaceutical company behind it, though it has been successful fighting cases individually.
Analysts predicted early on that liability could reach $50 billion, but after losing its first case in a $253 million verdict, Merck has won a string of civil cases in numerous states.
The company said last month it had added $70 million to its reserves for defending lawsuits over the blockbuster painkiller that it pulled from the market three years ago. As of Sept. 30, Merck had reserved a total of $1.92 billion for legal expenses and spent a total of $1.2 billion.
Payments would vary, depending on injuries and the length of time that Vioxx was used.
"We've been asked by the judge to talk to the plaintiffs and we are talking to them," Kent Jarrell, a spokesman for Merck, told the New York Times. "Right now, there is no finalized agreement."
Two attorneys told the paper, however, confirmed it independently, the Times reported.
"It's a huge settlement but Merck was paying hundreds of millions of dollars every year in legal fees alone to fight the lawsuits so the company clearly figured that it was best to simply get rid of all these cases," says CBS Legal Analyst Andrew Cohen.
Merck, based in Whitehouse Station, N.J., still faces a number of government investigations, both state and federal.
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