Merck begins to consider settlement.

Well, that didn't take long did it?

Today's Wall Street Journal reports Merck is considering settling SOME of the Vioxx cases.

As previously mentioned, "  No claims guy ever gets fired for settling a case, but lots of claims guys get fired for trying cases that have no business in front of a jury."  Merck and it's allies were stunned, and no that's not too strong a word, by the verdict last week in Angelton, as everybody knew that was their strongest case. The Wall Street Journal online edition last week stated that a Merck official being deposed in the upcoming Federal case was so shaken by the news of the verdict that they literally couldn't continue the deposition, so strong were the emotions at the size of the verdict.

My question is "How could they have not seen it coming?" Every observer leading up to the case knew Attorney Mark Lanier was and is one of the top trial lawyers in America. He had gotten a huge verdict in another case, in the same court, in front of the same judge, just  two years earlier. He and his team had spent months preparing, planning, testing and were totally ready for this trial. Merck's insistence on "defending every single case" is a joke, anyone with any claims or settlement experience knows it's a joke, and boy I'd love to know who signed off on that strategy. My guess is early retirement is looming for them.

Merck is going to have to confront the fact that they could have been proactive and negotiated with the trial lawyers and work on a global settlement, which while expensive would have been easily half what the cost will now be to settle this litigation in both absolute and relative terms. However, the old school model of defend to the death, get killed, and then blame the Jury, which if you've read the papers last week you know how many articles and editorials with the theme "juries are too stupid to handle complex medical litigation" there were.  The defendants are only to eager to blame the jury or the judge, but the simple fact is that if they had a coherent strategy to identify damages, classify the damages and then settle out on a global basis, they wouldn't be facing the dire prospect of the ruin of one of America's premier pharmaceutical companies. This myth that global settlements cost more then trials is destructive and false and in this instance will cost Merck and it's shareholders dearly.

Bottom line, Merck has only it's self to blame for this mess, and who ever signed off on the "defend them all" plan needs to get early retirement. If you settle, you keep your job and protect your shareholders. If you take them to trial, you risk the company and your livelihood. Seems like an easy call to me.

Posted on August 26, 2005 .