Merck braces for wave of Vioxx Lawsuits

posted on:
October 3, 2004

author:
Staff

 The flood of phone calls to plaintiffs’ lawyers began soon after pharmaceutical giant Merck & Co. Inc. announced Thursday that it would withdraw its painkiller Vioxx from the market because of safety concerns. 

But just how bad will the legal fallout get for the Whitehouse Station, N.J., drugmaker?

Merck is bracing for an onslaught of lawsuits, but some analysts – and even some lawyers who represent Vioxx patients – doubt that the company faces anything on the scale of the failed diet-drug combination known as fen-phen.

More than 100,000 lawsuits were filed by patients saying they were injured by fen-phen. The massive litigation has cost Madison, N.J.-based Wyeth $16.6 billion so far.

“Our preliminary estimate is that about 16,632 people may ultimately file a legitimate lawsuit” against Merck over Vioxx, analyst Tim Anderson wrote in a report issued yesterday by the Prudential Equity Group.

“We do not expect the liability to blossom into anything remotely close to fen-phen,” he added.

Even before Merck’s Vioxx withdrawal announcement, several hundred suits had been filed against the company by users of the arthritis pain medicine, including 175 in New Jersey.

“The number of cases will be growing exponentially,” said Andy Birchfield, a Montgomery, Ala., lawyer who has filed 58 Vioxx suits. About half involve the families of people who died from heart attacks or strokes while on the arthritis pain medicine, Birchfield said.

“I think you will have a lot of people now going back and recognizing that, when I had my heart attack or when my mom or dad had a heart attack, they were taking Vioxx,” he said. “We have received a tremendous number of calls” during the last two days.

Not ‘as big as fen-phen’

Even so, some lawyers do not see Vioxx litigation growing to rival fen-phen, at least in number.

“I don’t think it is as big as fen-phen,” said Sol H. Weiss, a Philadelphia lawyer representing dozens of Vioxx users, including some who died while on the drug.

Weiss, who also represents fen-phen users, said there would likely be fewer Vioxx cases because the drug leaves the body relatively quickly and does not appear to cause lasting damage unless a patient suffers a heart attack or stroke while taking it.

“Right now, the science looks like if you are going to have a Vioxx event, it will occur while you are on the drug,” said Christopher A. Seeger, a New York lawyer who represents more than 300 people who allegedly suffered a Vioxx-related heart attacks or strokes.

Shanin Specter, a Philadelphia lawyer involved in Vioxx cases, said that while there might be a more limited number of cases, the damages collected by successful plaintiffs will likely to be bigger than fen-phen.

“The vast bulk of fen-phen users had less significant injuries than a heart attack or a stroke,” Specter said.

The first Vioxx cases could go to trial at the end of this year or early next year. It is too early to estimate the ultimate cost to the company in legal fees and potential damages. However, some lawyers say it could be similar to litigation faced by Bayer AG over its cholesterol-lowering Baycol, which cost that company more than $1 billion.

Merck: Not sure of liability

“It is not possible at this time to reasonably estimate the company’s potential liability,” said Merck spokesman Tony Plohoros in a statement yesterday. “A series of highly unfavorable outcomes… could have a material adverse effect on the company’s financial position.”

Plohoros and other company officials declined to disclose how much money Merck would put in reserve to cover potential losses.

Until Thursday, Merck had consistently defended Vioxx in the face of studies that suggested links with cardiovascular problems.

The company said it was withdrawing Vioxx from the market because a new study had revealed the drug doubled the risk of heart attacks and strokes in patients who took the drug daily for more than 18 months.

Despite the studies findings, plaintiffs’ and defense lawyers agreed it was still necessary to show a link between the injury and use of the drug.

“There have been cases that we have evaluated and turned down where we could not find the strong connection between Vioxx and the heart attack,” Birchfield, the Alabama lawyer, said.

About 20 million people have taken Vioxx since it was introduced in the United States in 1999, the company estimates. The company said it was unclear how many of those people had used the drug regularly for more than 18 months.

Vioxx generated $2.5 billion in worldwide sales a year – 11 percent of the company’s total.

Merck’s stock, after plunging 27 percent on Thursday, rose 31 cents yesterday to close at $33.31.

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