It has been a long and difficult journey of almost 12 years since the recall of the anti-inflammatory drug Vioxx. The case in Canada started with the recall of the drug at Halloween of 2004 and it took until Canada Day of 2016 when the claims were finally paid. On June 29, 2016 a Purolator courier arrived at the Miskin Law Office bearing a letter and one cheque for payment of the law firm’s Vioxx successful claimants. The Miskin Law firm represents 10% of all successful Vioxx claimants with clients in every Province of Canada. Each individual client was personally billed and our firm has completed payment to over 300 individual claimants plus beneficiaries of estates of victims.
While most claimants and lawyers are disappointed with the amount we are all happy it is finally, after many delays, actually paid. Our expectations were raised in November 2007 with a large and generous settlement for victims in the United States totalling $4.55 billion in US funds. Some claimants who survived heart attacks and strokes connected to Vioxx did not live long enough to see the money. For those people their families will receive the compensation. For many people, including most of our law firm’s clients, there is no compensation under the terms of the settlement. For successful stroke claimants the settlement which was capped at $5,000, but is paying less, is almost an insult. Nevertheless, Canadians are fortunate compared to Australian claimants who were paid less than Canadians. In the UK no settlement was achieved and the case is abandoned. In every other country in the world victims of Vioxx are getting nothing at all. Meanwhile, earlier this year a settlement of 830 Million US dollars was reached for Merck shareholders who lost money on their investment due to Vioxx.
The Canadian settlement pays 903 victims and 1306 family members of victims a total amount of $15,384,154 Canadian dollars. This is the amount paid after administrative costs of the settlement and fees and expenses of the class action lawyers. Except for stroke claims, amounts paid for claims vary, but are based on a points assessment for each claim with a maximum of 100 points for a heart attack or sudden cardiac death victim. Points are reduced by the risk factors of the victim. The assessment process was completed last year so all we needed to know to determine the value of a claim was the value of a point. This is a simple process where the total dollars available are divided by the total number of points awarded. We now know that a point is worth $388.69. That means that a total of about 39,580 points were awarded for all claims.
To determine the value of a point it was necessary to wait for a court approval process related to the fees of the Class Action lawyers. When the original court approval was given to the settlement $6,000,000 was allowed for those lawyers with the right to come back at the end of the process to request more money which, of course, they did. This took time due to the reluctance of the court in Quebec to approve the additional fees. The Quebec Judge finally relented and agreed to the additional fees mainly because he did not want to rule against what the courts in other Provinces had already approved. This gave an additional $2,800,000 to the lawyers for fees. By allowing this the value of each point was reduced by about $70.74. These legal fees will be split by a large group of lawyers across Canada who issued claims on behalf of representative claimants in every province. This was the compensation to those lawyers as approved by the courts for working on and advancing the class action proceeding. The Miskin Law firm as a policy prefers individual claims rather than class actions and chose not to be part of that group. Instead Miskin Law Office represented a large number of individual victims of the drug.
The amounts paid represent $3,886.90 for each stroke claimant. For the few with the maximum 100 points for heart attack or sudden cardiac death the maximum individual compensation of $38,869 is paid. The family members of non-stroke victims are entitled to a small percentage of the amount awarded to their parent or spouse. Where the victim is no longer alive money will be paid to their beneficiaries (usually immediate family). The amount paid does not include any payment for the cost of medical, pharmacy, insurance and other records and documents obtained to prove the claim and that amount varies from case to case. Those expenses have been paid by the lawyers who will be reimbursed from the awards to their successful clients. With contingency fees applying the lawyers do not get reimbursed or charge any fee for unsuccessful claims. Most individual Vioxx claimants have lawyers who put forward the claims on their behalf and who typically charge about one third of the amount paid after deduction of the expenses from the amount received. They must also charge GST and applicable provincial sales taxes or HST on legal fees. This does not leave much for the victims. Fortunately victims and their families do not pay income tax on what they receive.
We can ask what went wrong in the Vioxx case, so that victims have so little to show for their serious injury. What went wrong is what happens in most Canadian class action proceedings. In Canada we have a class action system where years can be wasted in battles between class action lawyers over who will have carriage (control) over the proceedings. This happened in the Vioxx case. Merck also fought very hard to stop the class action from proceeding losing every step of the way but appealing the decisions as far as they could. By the time settlement discussions began the known science around Vioxx had developed so that the link to stroke was very weak. As well, it became known that there was almost as much risk of heart attack from other anti-inflammatory drugs as there was from the Cox-2 inhibitors such as Vioxx and other drugs like Bextra and Celebrex. Celebrex remains on the market and Bextra which is more similar in strength and chemical structure was recalled soon after Vioxx. With much less publicity and no lawyer infighting claims in Canada related to those drugs settled sooner than Vioxx with claimants receiving more money.
Comparing the Canadian system to the American system shows a serious weakness in our system which allows for major delays to the detriment of claimants. In the USA claims are brought on an individual basis for each individual and when there are many claims they are co-ordinated through the courts. It is called “Multi District Litigation” or “MDL”. Individual cases can proceed quickly and that is what happened with Vioxx. The first trial in Texas resulted in a huge judgment against Merck. Other cases were tried with mixed results and Merck faced the possibility of hundreds of trials within a few years of the recall of Vioxx. They chose to settle and pay large amounts to all US victims with Canadians and other foreign claimants excluded from the settlement. Knowing how the system works the Miskin Law Office tried to get as many claims as possible brought in the US courts. Unfortunately, we could not proceed that way and were forced back into the class action. We also had some clients opt out of the Canadian class action hoping that we could get better results if we had individual claims. That did not work out as the Class Action settlement brought back all of the opted out claims. We were then at the mercy of the class action process and the terms of settlement.
Miskin Law Offices will continue to represent individual clients in drug liability and other product injury cases, and we will continue to try to get better compensation where possible for our clients than the class action system brings. Much has been learned from the Vioxx case and hopefully it will lead to a better system for similar types of claims brought in the future.