Merck to Pay $100 Million to Settle NuvaRing Lawsuits

Merck

Merck & Co., Inc. (NYSE:MRK) will pay more than $100 million in order to settle thousands of lawsuits regarding its NuvaRing prescription contraceptive ring, Bloomberg reported Thursday, citing sources familiar with the agreement.

Merck is facing more than 1,700 lawsuits regarding NuvaRing; users claim that the company failed to adequately warn consumers of the increased risk of developing fatal blood clots when using the NuvaRing; the contraceptive poses a higher risk of serious blood clots than many competing products, a risk that users claim Merck downplayed.

The sometimes fatal, heart-attack inducing blood clots described by plaintiffs are known as venous thromboembolism, according to a recent filing with the U.S. Securities and Exchange Commission. Plaintiffs in the lawsuits against Merck are seeking damages for a variety of injuries purportedly caused by the NuvaRing, including heart attack, stroke, and sudden death.

NuvaRing, a hormonal contraceptive that combines both estrogen and progestin in the form of a vaginal ring to prevent pregnancy has been publicly available to women in the United States since 2001. It was first linked with a higher risk of blood clots in 2011 by the U.S. Food and Drug Administration; it was found that the type of progestin used in the NuvaRing is twice as likely to cause blood clots than other, similar hormonal contraceptives, according to Bloomberg.

The settlement Merck agreed to on Thursday will resolve lawsuits in federal and state courts in Missouri and New Jersey and provide an average payout of $58,000 for each complaint.

Those numbers might seem hefty, but Merck may actually be fairing quite well in comparison to companies like Bayer AG, whose Yaz and Yazmin hormonal birth control pills came under fire last year for similar reasons: the pills caused increased risk of blood clots leading to heart attack and stroke. So far, Bayer has paid more almost $1.6 billion to settle lawsuits associated with the drug.

“Merck may be getting out much more cheaply than its competitors because proving the liability case against the NuvaRing device appears to be more difficult than against other contraceptives,” Carl Tobias, a professor of product-liability law at the University of Richmond in Virginia said in an interview with Bloomberg.

Merck opened on Friday morning down 5 cents to $53.72, and has reported fourth-quarter earnings below estimates, at around 88 cents a share. The company has forecast 2014 profits of $3.35-$3.53 a share compared with the $3.48 a share projected by analysts, per Bloomberg.

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