Merck’s Bad Day in Court

posted on:
August 17, 2006

author:
Staff

 NEW YORK —Merck was found negligent in the latest Vioxx case, as a jury in New Orleans federal court found that the drugmaker misrepresented the risks of the arthritis painkiller. 

In a double-whammy, a New Jersey court judge tossed an earlier verdict that favored Merck in a separate trial, based on new evidence.

The company said it plans to appeal the verdict from the New Orleans case.

“We disagree with the jury’s verdict,” said Phil Beck, an outside counsel for Merck, in a press release. “The plaintiff was at increased risk for a heart attack regardless of whether he was taking Vioxx.”

Also, the jury awarded the plaintiff $1 million in punitive damages. Merck’s general counsel Kenneth Frazier said the finding and the damages were “totally uncalled for.”

Jerry Barnett, 62, a former agent for the Federal Bureau of Investigation and a former Vioxx patient, is the fourth plaintiff to successfully sue Merck, blaming the drug for his non-fatal heart attack.

The jury held that Merck was negligent in warning Barnett and his doctors about the risks of Vioxx and said compensation of $50 million was adequate.

The stock price for Merck (down $1.25 to $39.93, Charts) slipped on the news.

Plaintiff attorney Andy Birchfield, whose firm is representing some 7,000 Vioxx plaintiffs, said that new evidence was introduced showing that Vioxx caused a dangerous amount of plaque buildup that contributed to Barnett’s heart attack in 2002, and lead to his two bypass surgeries.

“The evidence here, from a scientific and medical standpoint, is very strong that Vioxx actually caused plaque buildup, in addition to the heart attack,” said Birchfield, noting that this evidence could factor into upcoming trials.

Bad day for Merck

Judge Carol Higbee a New Jersey judge tossed out a November verdict that had favored Merck based on new evidence which is unrelated to the New Orleans case. A law clerk said the decision was based on a correction issued by the New England Journal of Medicine in June.

The NEJM correction removed a previously published finding that Vioxx increased the risk of heart attacks only after 18 months of Vioxx use. This finding, based on a Merck study, is the reason why Merck took the drug off the market, but it has also been used by defense lawyers to undermine claims that risks emerged earlier than 18 months.

Merck pulled its arthritis painkiller Vioxx off the market in 2004, after a Merck-funded study found that the drug increased the risk of heart attacks and strokes.

Since that time, some 14,200 cases have been filed against the New Jersey-based drugmaker from former Vioxx patients and their families.

Merck has consistently denied all allegations of wrongdoing, saying that Vioxx did not kill anyone, and has vowed to fight each case individually.

The loss of Vioxx evaporated $2.5 billion in annual sales, and resulted in a 40 percent plunge to Merck’s stock price. Since that time, the stock price has partly recovered, and is now down about 8 percent from its September 2004 level.

Many analysts believe that Merck could face tens of billions of dollars in potential damages as cases proceed over the next few years, but this is mostly priced in to the stock.

Before Thursday’s verdict, Merck was leading the fight with five courtroom wins and three losses. Merck won the most recent case in a Los Angeles state court Aug. 2, when a jury found that Vioxx did not cause a plaintiff’s non-fatal heart attack.

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