Merck’s Vioxx Victory may not Help Future Cases

posted on:
November 4, 2005

author:
Staff

Merck & Co. can’t savor yesterday’s victory in the second trial over its Vioxx painkiller for long, say analysts and lawyers tracking the 6,400 other lawsuits the company faces for injuries or deaths linked to the drug.

Merck, the No. 3 U.S. drugmaker, faces its next trial on Nov. 28 in Houston, where a widow of a Vioxx user claims her husband died after one month on the drug. Analysts say Merck faces billions of dollars in potential liability from such cases following its New Jersey victory.

A jury in Atlantic City ruled yesterday that Merck wasn’t liable to an Idaho postal worker, Frederick Humeston, who blamed his 2001 heart attack on the drug. The victory followed an August verdict by Texas jury that told Merck to pay the widow of a Vioxx user $253 million, an amount that will drop to $26 million under state law. Whitehouse Station, New Jersey-based Merck has vowed to fight each lawsuit on a case-by-case basis.

“I still think it’s going to be a long, challenging road ahead for Merck,” said Jake Dollarhide, chief executive of Longbow Asset Management Co. in Tulsa, Oklahoma, who manages about $25 million in assets.

Merck has set aside $675 million to defend its handling of Vioxx, which the company withdrew last year after a study showed the drug doubled the risk of heart attacks after 18 months of daily use. The company has set aside no reserves for verdicts and has no plans to settle any cases, General Counsel Kenneth Frazier said in a teleconference yesterday after the New Jersey verdict.

“We do not intend to allow people to use Merck, in effect, as an open bank for people to sue us,” Frazier said.

Investors project Merck’s liability could run as high as $35 billion, “but I would guess that the ultimate liability is much less than that,” said Michael Krensavage, an analyst at St. Petersburg, Florida-based Raymond James & Associates Inc. “There will be a lot more trials, and they’re just going to have to fight one by one.”

Years of Litigation

David Heupel, who helps manage $2.5 billion at Minneapolis- based Thrivent Financial for Lutherans, said Merck faces years of litigation, and its success will vary depending on each plaintiff.

“You’re going to have to look at each case relative to who the patient was” and their health history, Heupel said.

The Humeston verdict showed jurors will accept the company’s defense that it developed and marketed Vioxx honestly, Frazier said. Jurors can conclude “the science doesn’t support the claims that are being made,” particularly for short-term users, Frazier said in the conference call.

Merck denies short-term users like Humeston were at risk.

“Short-term use was a huge factor in my decision,” Humeston juror Vickie Heintz said after the verdict.

First Federal Case

Merck will defend its first federal case this month in Houston, where the widow of Robert Irvin Jr. claims Vioxx triggered his heart attack after one month of use. Irvin, a former college football player and father of four, ran a seafood business in St. Augustine, Florida. He took Vioxx for back pain.

The Humeston verdict won’t affect Irvin’s case, said attorney Jere Beasley, whose firm, Beasley Allen Crow, represents the widow, Evelyn Irvin Plunkett.

“First of all, we have a death,” Beasley said. “We have an autopsy. We will win on the science. We’re not going to let Merck come in and attack our plaintiff.”

Frazier said there was no medical or scientific evidence that Vioxx contributed in any way to Irvin’s death. The autopsy, he said, showed a buildup of plaque in Irvin’s arteries.

At Humeston’s trial, Merck’s lawyers said his age, gender, weight, cholesterol, blood pressure and job-related stress, not Vioxx, caused his heart attack. Humeston, a former U.S. Marine, claimed his heart attack was caused by the 56 Vioxx pills he took for knee pain that began when he was wounded in Vietnam.

Stress

“I don’t think Vioxx caused his heart attack,” said juror Nellie Stetzer, 60. “I think it was the stress in his life and his age and his gender and the pain with his shrapnel wounds from Vietnam. I just didn’t believe that his heart attack changed his life the way he said it did.”

Lawyers who have sued Merck sought to downplay the significance of the Humeston defeat. Attorney Mark Lanier, who won the Texas verdict in August, said more bad news is coming.

“In any mass tort litigation, the defense usually wins the first four or five cases,” Lanier said. He noted that asbestos companies won the first 10 cases tried against them before facing a damage award. Lanier has won millions in damages from former makers of asbestos, an insulation linked to cancer and lung disease.

“I wouldn’t be surprised if Merck won the next four cases that are scheduled to be tried in federal court,” Lanier said. He said the federal rules of evidence are more stringent than those used in most state courts.

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