Vioxx Plaintiffs Make Claim for MSP Reimbursements Too Late

Medicare Set-Aside Blog on December 6, 2012 | Posted by


As you may be aware, Merck agreed to fund a $4.85 billion dollar settlement for claims arising from the painkiller Vioxx back in 2009, resolution of which is still ongoing. On Tuesday, the US District Court for the Eastern District of Louisiana refused to allow plaintiffs amend their complaint to add claims for reimbursement under the Medicare Secondary Payer Act and Federal Employee Health Benefits Act. The Court did not express an opinion as to “the underlying merits of Plan Plaintiffs’ claims, or how or where they should go about pursuing them….” The Court decided only that, in its discretion, the proposed amendment was not appropriate at this time.

I guess what made this order interesting (from an MSP perspective) was that it left it up to the lawyers to treat Medicare reimbursement as an after-thought [I guess they never heard of In re Zyprexa or Stricker]. The best I can tell from the settlement agreement, each person’s recovery is determined by a detailed point system so no matter what ultimately might need to be repaid for related treatment, the basis is the same. In practice we know that private insurers are much more willing to reduce their liens than Medicare and that some states have anti-lien statutes that would preclude reimbursement altogether, so the point system creates an uneven playing field from the beginning. Interesting that they later thought to recover MSP debt separately – I’m guessing they want that over and above the agreed settlement amount. Too little, too late.

So will our diligent attorneys next try for a private cause of action under 1395y(b)(3)(A) instead? It won’t likely succeed either, but that’s my prediction. Given that heart attack or stroke were involved and hospital bills likely large, many people will be left with nothing after expenses are satisfied and are probably not happy about it. These attorneys will, therefore, continue to look for more money to cover these reimbursements so they won’t come out of their fees (which were what percentage of $4.85B?). Good luck with that since the government has a priority right to the funds used to cover those fees.

The take away here is that you really need to know what your exposure is before you can arrive at a fair settlement for the individuals involved. If you disregard Medicare interests for too long, the worse the situation will get. Medicare will get repaid – but it is up to you to negotiate by whom.

IN RE VIOXX PRODUCTS LIABILITY LITIGATION THIS DOCUMENT RELATES TO ALL CASES

MDL NO. 1657 SECTION: L
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA
2012 U.S. Dist. LEXIS 172471
December 4, 2012, Decided

Settlement Details can be found at:
In re Vioxx Prods. Liab. Litig., 2008 WL 3285912
(E.D. La. Aug. 7, 2008)