Vioxx and Merck: Saturday update

ProfessorBainbridge.com (via Overlawyered):
“The odds that Merck eventually ends up pulling a Johns Manville and resolving these cases via bankruptcy reorganization just went up – a lot.”

Houston’s Clear Thinkers (via Overlawyered):
“Inasmuch as Merck is currently facing another 4,200 Vioxx lawsuits, the verdict is not exactly a rousing start for Merck in the defense of the lawsuits. Merck’s defense in the lawsuit seemed to be reasonably strong — that is, Mr. Ernst, who had only taken Vioxx for eight months, died of arrhythmia that Vioxx has not been shown to cause. However, the Brazoria County coroner testified — over Merck’s strenuous objection because of the plaintiff’s failure to designate the coroner as an expert prior to trial — that Mr. Ernst’s arrhythmia could have been caused by a heart attack. That testimony seemed to hurt Merck badly, as the Chronicle interviewed an alternate juror who had been dismissed from the trial immediately before deliberations began who remarked that Merck “wasn’t doing the right thing by marketing the drug the way they were.” Plaintiff’s lawyer Mark Lanier accused Merck of dragging its feet after the Food and Drug Administration told it in late 2001 to put a label on Vioxx warning of potential heart risks, and during closing arguments, Mr. Lanier contended that Merck saved $229 million by waiting months to add the warning label. Not surprisingly, that’s the amount of of punitive damages awarded by the jury.”

PointofLaw.com again:
“You might’ve thought that you needed to marry a billionaire to get $24 million from a one-year marriage, but we now know that that a one-year marriage to a 59-year-old Wal-Mart produce manager with arteriosclerosis is worth $24 million in compensatory damages. Mrs. Ernst is apparently very lucky that her new husband died from a sudden arrhythmia rather than from a brain tumor or lightning strike, because I’ll bet a year’s salary that she didn’t have a $24 million life insurance policy on him to compensate her in the event of a sudden death.”

NY Times: On the jury deliberation:
“He said jurors were upset by Merck’s aggressive marketing of Vioxx and decided to aware $229 million in punitive damages after seeing a Merck document that showed the company calculated that it would make $229 million in additional profit if changes to Vioxx’s label were delayed by four months.

But some other jurors on Friday described the panel as not fully convinced of Merck’s liability when the group began deliberating on Thursday.”

NY Times: Can Cox-2’s come back?
“For one thing some analysts have said that sales of Celebrex, another drug by Pfizer that is the only cox-2 remaining on the United States market, are already rebounding after a big slump last winter. Celebrex sales, they say, could reach as high as $2 billion this year, a decline of 39 percent from last year. The rebound comes despite warnings that Celebrex – like Vioxx and Bextra – can cause cardiovascular problems in some patients. Merck has another cox-2 drug, Arcoxia, that is already approved in 54 other countries and generated worldwide sales of $100 million in the first half of this year.”

Illiterate Withdrawal:
“Merck has just been ordered to pay $250m to the widow of a ‘Vioxx victim.’ I put Vioxx victim in quotes because the man who died had only taken the perscription drug for seven-months. This is way below the 18-months of usage that some studies show might slightly increase the risk of arrhythmias. Merck said it was ‘disappointed’ with the verdict, claiming ‘the plaintiff did not meet the standard set by Texas law to prove Vioxx caused Mr Ernst’s death.’ There is no reliable scientific evidence that shows Vioxx causes cardiac arrhythmias. Even if Vioxx does increase the risk, it is still only a relative increase. An increase of even 10% over the absolute risk of 1% (just used as an example) is not that worrisome. Merck now faces numerous lawsuits that will cost them from $4-$50 billion over the next decade. What a waste of money! That money could be used to research better drugs or even cures to current diseases. This is yet another example of frivolous lawsuits that are brought by greedy lawyers and a sue happy America.”

The Intuitive Life Business Blog:
“If this one case produces a verdict of almost $255 million, then even if only 10% of the 4000 cases already filed were settled in favor of the plaintiff, not Merck, it could theoretically cost upwards of $100 billion, a crippling blow to one of the largest pharma companies in the world.

The verdict wasn’t just based on the medical evidence, however. The jury ruled against Merck on three key questions: Merck failed to warn doctors of the dangers of Vioxx, that the drug was improperly designed in the first place (and that’s going to be just about impossible to recover from and significant fuel for attorneys representing other clients), and finally that Merck’s negligence caused the death of Robert Ernst.

Merck, of course, is going to appeal, but the writing’s on the wall, and the implication for big pharma overall is clear: you can’t risk developing new drugs at all, ultimately, because even with the best disclosure mechanisms and the best communications strategy, you can find that the little speed-bump in the testing phase comes back as a 500-foot monster and, like this Vioxx settlement, might just crush your firm.”

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