Merck agrees to proposed $27.7 million settlement over Fosamax lawsuits

NEW YORK (Reuters) - Merck & Co Inc said on Monday that it was prepared to pay $27.7 million to settle lawsuits by hundreds of people who sued the company over allegations that its osteoporosis drug Fosamax caused bones in the jaw to deteriorate.

Lawyers for Merck and plaintiffs disclosed the proposed settlement at a court hearing in New York to resolve 1,140 lawsuits pending in federal and state courts. Any settlement would need to be approved by a judge.

Merck, which confirmed the agreement later on Monday, said the accord requires a 100 percent participation rate and evidence that the claimants satisfy eligibility requirements. The deal covers about 1,200 people, the company said.

“We hope to bring this to a successful conclusion,” Paul Strain, a lawyer for Merck, said at the hearing in U.S. District Court in Manhattan before Judge John Keenan, who has presided over federal litigation by plaintiffs claiming that they developed osteonecrosis of the jaw from taking Fosamax.

The condition is a disease that causes bones in the jaw to deteriorate or die.

The settlement would resolve a large portion of the 5,255 product liability cases facing Merck over Fosamax, a one-time blockbuster drug with $3 billion in sales in 2007.

Sales have declined since Fosamax lost patent protection in 2008. Through September, Merck had reported $421 million in Fosamax sales in 2013.

Of the lawsuits over Fosamax, about 860 of the cases were before Keenan. Since the cases were consolidated in 2006, Keenan has presided over all of the federal cases.

The judge had held a series of “bellwether” trials, allowing Merck and plaintiffs’ lawyers to assess trends and outcomes in similar cases.

The last Fosamax trial before Keenan resulted in a $285,000 verdict for plaintiff Rhoda Scheinberg in February.

Merck lost just one other of the five bellwether trials when a jury awarded Florida resident Shirley Boles $8 million. The judge later cut that sum to $1.5 million.

Merck won two other trials in a New Jersey state court over jaw injuries plaintiffs blamed Fosamax for.

At Monday’s hearing, Timothy O’Brien, a plaintiffs’ lawyer with Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor, said that plaintiffs’ law firms had until January 13 to signify their intent to participate in the settlement process.

Plaintiffs have until March 31 to opt-out of the settlement, the Merck lawyer, Strain, of law firm Venable said after Monday’s hearing. He said Merck has until May 15 to decide whether or not it will go forward with the deal.

Merck said in a statement that the settlement does not cover the 4,115 lawsuits the company continues to face by people claiming to have sustained femur fractures or other bone injuries due to taking Fosamax.

The case is In Re Fosamax Products Liability Litigation, U.S. District Court, Southern District of New York, No. 06-md-01789.

Editing by Jan Paschal and Grant McCool