By LINDA JOHNSON
Associated Press

TRENTON, N.J. - Merck & Co. must appoint two new independent committees and a chief medical officer to monitor the safety of its medicines and drugs in development, under a proposed settlement to end long-running shareholder suits brought over the company's former painkiller Vioxx.

The one-time blockbuster drug was pulled from the market in 2004 because it doubled the risk of heart attacks and strokes. Thousands of lawsuits brought by patients, their survivors and others alleged that Merck officials knew about those risks and hid them. Merck reached a $4.85 billion settlement to answer most of the lawsuits alleging patients were harmed or killed, and continues to make payments as individual claims are settled.

The new settlement, announced late Tuesday, would end numerous lawsuits consolidated in New Jersey that have been brought by Merck stockholders against the company and dozens of current and former Merck executives and board members.

The settlement calls for Merck, the world's second-biggest drugmaker, to fill a previously announced position of chief medical officer. That person would be the company's public voice on product-safety issues, be independent of Merck Research Laboratories, work with government regulators and oversee the truthfulness of product advertising. The chief medical officer would report directly to Merck's chief executive, serve on the company's executive committee and be able to meet with other board members without any Merck executives being present.

The chief medical officer also would serve on two new committees Merck must establish under the proposed settlement.

The new product-safety committee would draft and implement procedures to monitor the safety of any drug sold or studied by Merck, and it would set up procedures enabling any employee to raise safety concerns.

The other committee would identify and promptly address risks that could affect the company, its products or customers. That arrangement also would also protect the interests of shareholders - an issue because Merck lost $28 billion in market capitalization overnight as its shares plunged when it pulled Vioxx from the market on Sept. 30, 2004. At the time, Vioxx was being taken by about 2 million people and brought in 11 percent of Merck's total revenue.

The settlement requires Merck to pay $12.15 million in attorneys' fees for the plaintiffs.

Merck also must publicize all new and ongoing studies of experimental drugs it is developing and all results of those studies, through a federal Internet registry, on its Web site and in major medical journals.

The settlement must be approved by a New Jersey judge. Superior Court Judge Hon. Carol Higbee has scheduled a final hearing on the settlement for March 22 in Atlantic City.