My take?
Merck and its insurers are screwed.
27,000 deaths at a minimum of 500K each equals $13.5 billion before Merck's defense costs are thrown in. That is an absolute minimum. If it more like $1 million per case, then $27 billion. These are still low amounts.
That doesn't even include the punitive damages, which under recent law can be a single-digit multiple of the total award, so multiply by two or three.
Ten to fifteen percent of $13.5 billion to $27 billion, plus costs, is a tidy fee the class action/mass tort boys, especially since the work has been done for them by the FDA and Merck itself. Juice it up by a factor of two or three, and you can see that the attorney fees amounts--$8-12 billion--are huge for a case that promises to be not too much of a fight. Pure gravy.
Have you seen the ads? vbg
Edwards will try to get in on it, I suspect.
Don't know what Merck's insurance program is. But it surely has coverage for some level of catastrophic incident like this, so some insurers are likely to get hammered, too.
I doubt that anything can be done politically to get Merck off the hook. Plus, it sounds like they kind of deserve to be hit.
Bankruptcy? Quite possible, if the awards start to get much higher than those I suggest, which are modest, on the whole.
I wouldn't touch Merck stock with a 10 foot pole.
From a legal standpoint, I doubt that any federal tort reform effort would apply to Merck.
Merck is likely screwed in a big way. |
