Year: 2004
Cost: $8.9 billion
When Merck’s (MRK, $53.41) Vioxx first hit the market in 1999, it was hyped as a revolutionary breakthrough medication for arthritis pain. And like Pfizer’s Bextra, it soon became a blockbuster hit.
Five years later, in September 2004, Merck was forced to pull the drug from the market after studies revealed that Vioxx greatly increased the risk of fatal heart attacks and strokes. By that point, 20 million Americans had already taken the drug. Later research estimated that 88,000 Americans had heart attacks from taking Vioxx, resulting in 140,000 deaths.
The costs in dollar terms were also staggering. The pharmaceutical giant settled a class-action lawsuit for $4.85 billion in 2007 and agreed to a $950 million settlement with the DoJ in 2011. In 2016, shareholders settled a class-action lawsuit with Merck for $830 million. Statista estimates that when all other expenses are included, the Vioxx recall cost the company $8.9 billion.
Shares in Merck initially tumbled 27% on the news and languished for two years before recovering to their pre-recall levels.
