Vioxx Settlement: Lawyers, Patients and Insurers Scrap Over Slices of $4.8 Billion Pie

(MoneyWatch)  With the $4.85 billion Vioxx settlement with Merck safely in hand, now the squabbling has begun over who, exactly, is going to receive that money: the patients who were hurt, the insurance companies who paid for the faulty drug, or the lawyers who engineered the jackpot deal?

The Louisiana federal court had capped lawyers' fees at 32 percent of the deal. But that was less than what the plaintiff-patients and their counsel had agreed to, and so the lawyers have gone back to court to say, "Hey, we had a deal with our clients here. You can't override it with your fancy rulings!"

Separately, in apparent proof that not all lawyers are completely evil, the lawyers, led by Seeger Weiss's Christopher Seeger, have persuaded the insurance companies to reduce the size of the liens they had placed on patients involved in the litigation. (The insurance companies, seeing a boat load of cash appear on the horizon in the form of the settlement, immediately dunned the patients who earned it for reimbursement of the medical bills. God bless American healthcare!)

The lien-reduction deal applies to 100 insurance companies and, according to Seeger, will increase the total from the settlement that actually goes to patients.

You can see how these two events seem to dovetail neatly. On the one hand the lawyers have persuaded the insurers to reduce their slice of the pie. On the other, they're grasping for a bigger slice for themselves.

• Read the lawyers' motion for greater fees here.

Image by Flickr user net efekt, CC.