U.S. drugmaker Merck & Co on Friday said it would pay $830 million to settle a federal class action lawsuit involving allegations the company failed to adequately inform investors about heart risks from its now-recalled Vioxx pain medication.
The drug was approved by U.S. regulators in 1999 as a new type of treatment for pain and quickly became a blockbuster product, ultimately used by an estimated 20 million Americans. But the company in 2004 recalled Vioxx from the market after a colon-polyp prevention study showed it more than doubled the risk of heart attacks or stroke after 18 months of use.
After thousands of former users of Vioxx sued Merck, claiming they had been harmed by the drug, Merck in 2008 settled most remaining product-liability lawsuits for $4.85 billion.
But other litigation continued, including a multi-district class action lawsuit pending against Merck in New Jersey federal court, which alleged Merck kept investors in the dark about negative data from earlier company-sponsored trials of the medicine.
Merck on Friday said it had agreed to settle that lawsuit by paying $830 million to investors who bought Merck stock between May 21, 1999 and October 29, 2004, plus pay an additional amount for attorneys’ fees.
The company’s cash payment for the settlement and fees will be about $680 million, after reimbursement from insurance policies, Merck said, and the company will record a charge for that amount in the fourth quarter of 2015.
Merck, in a statement, said the settlement did not constitute any admission of liability or wrongdoing by the drugmaker.
The company said it still faces other individual securities lawsuits related to Vioxx.