Comments on: Merck and Vioxx http://timworstall.com/2007/11/10/merck-and-vioxx/ It is all obvious or trivial except... Sat, 20 Mar 2010 00:24:59 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Umbongo http://timworstall.com/2007/11/10/merck-and-vioxx/comment-page-1/#comment-2114 Umbongo Sat, 10 Nov 2007 15:46:38 +0000 http://timworstall.com/2007/11/10/merck-and-vioxx/#comment-2114 How much of the $4.85 billion was pocketed by the lawyers? My guess is anything from a third to a half which I believe is typical of commission rates for a no win/no fee deal in the US. So, to be generous to the lawyers, claimants still get around $3.2 bn and Merck still pays $4.85 bn. However, in the end and if Merck is still in business, Merck has to recover those costs from somewhere. I guess a lot comes from its insurers (ie we all pay) and the rest will be built into the cost/pricing structure of the company ie future customers and Merck shareholders pay. Actual costs to the lawyers were, what, $200 million. So consumers would have to cough up, say, $400 million to get Merck into court without a no win/no fee arrangement. I don't know the odds of Merck winning or losing a court action but, whatever way we go, the lawyers win: only it seems they win bigger if they take a risk. In fact, unless they were going to win bigger, over the long term, they would generally opt for a fixed/time based fee structure, not a bet on whether or not the deep pockets will settle. Seems then the consumer gets a better deal (if that equates to lawyers getting less) if our system is adopted rather than the US one. BTW Tim what happened to the "preview" facility on your comments. How much of the $4.85 billion was pocketed by the lawyers? My guess is anything from a third to a half which I believe is typical of commission rates for a no win/no fee deal in the US. So, to be generous to the lawyers, claimants still get around $3.2 bn and Merck still pays $4.85 bn. However, in the end and if Merck is still in business, Merck has to recover those costs from somewhere. I guess a lot comes from its insurers (ie we all pay) and the rest will be built into the cost/pricing structure of the company ie future customers and Merck shareholders pay. Actual costs to the lawyers were, what, $200 million. So consumers would have to cough up, say, $400 million to get Merck into court without a no win/no fee arrangement.

I don’t know the odds of Merck winning or losing a court action but, whatever way we go, the lawyers win: only it seems they win bigger if they take a risk. In fact, unless they were going to win bigger, over the long term, they would generally opt for a fixed/time based fee structure, not a bet on whether or not the deep pockets will settle. Seems then the consumer gets a better deal (if that equates to lawyers getting less) if our system is adopted rather than the US one.

BTW Tim what happened to the “preview” facility on your comments.

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