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Thanks to New Agreement, Insurers Get Smaller Piece of the Vioxx Pie; Injured Get the Compensation They Deserve

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US District Judge Eldon Fallon in New Orleans approved a groundbreaking agreement this week ensuring that patients who were injured by the Merck drug Vioxx will not have to pay undue portions of their settlements to the insurance carriers who covered their medical expenses.

Insurers have been trying to recover the money they spent on Vioxx patients’ treatment. Since placing liens against amounts awarded to Vioxx users or their families, they have (unsuccessfully) been putting pressure on plaintiff lawyers to disclose the names of all Vioxx claimants. Former Vioxx patients were facing the prospect of paying 30% or more their settlements to their insurance carriers.

Thanks to the agreement negotiated by attorney Christopher Seeger, the amount of liens that private insurers can recover will be reduced in every case by at least 50%. There will also be a limit placed on the total amount an insurer can receive from an individual claimant.

"It’s a great deal for the (insurance) carriers. It’s a very good deal for the claimants," said Seeger, co-lead counsel for plaintiffs in the consolidated federal Vioxx cases.

Insurers could get at most 15 percent of a $100,000 settlement, or $15,000, and 10 percent of any settlements worth more than $250,000. It’s the first such settlement with insurers in a mass litigation case, Seeger said.

Seeger said the insurer agreement won’t delay payments to Vioxx claimants — most of whom have received only partial payments or nothing so far. He said it will dramatically speed up lien recoveries by insurers and save them legal costs. About 70 percent of insurers who filed liens are participating, and the deal is open to the others, he said. –Linda A. Johnson, AP

Vioxx, the blockbuster painkiller that Merck introduced in June 1999, was withdrawn from the market on September 30, 2004 after it caused thousands of heart attacks and strokes, some of which ended in death. Though payments for the $4.85 billion settlement reached between Merck and about 50,000 claimants began on August 28, 2008 and thousands of checks go out every month, many claimants have still received little or no compensation for their injuries.