No Clear Trend in Vioxx Lawsuits

posted on:
April 21, 2006

author:
Staff

NEW YORK—After millions in expenses and hundreds of hours of court time in six separate trials, neither Merck & Co. nor plaintiff attorneys have captured the upper hand in the litigation blizzard that followed the withdrawal of the pain medication Vioxx, experts say.

On Friday, jurors in south Texas found Merck liable for the death of Leonel Garza, a 71-year-old man who suffered heart attack after taking Vioxx for one month. That ties the score at three wins for plaintiffs and three for Merck.

Merck, which insists it will try each case and vowed to appeal the Texas verdict, disclosed this week that the number of lawsuits has grown to more than 11,500, up from about 9,500 three months ago.

The stakes involved are staggering. Analysts estimate Merck’s potential liability could reach $50 billion. In the three cases it lost, it has been ordered to pay $298.5 million to plaintiffs or their heirs, although state laws will reduce that to no more than $33.85 million.

But a global settlement seems far off – if it ever happens – and Merck’s defense lawyers have scored enough points at the first trials to make the company optimistic its strategy is correct and the final tab will be considerably less.

“I don’t think we’ve seen anything to push Merck in the direction of settlement. They are fighting well and telling a credible story,” said Ben Zipursky, a professor at Fordham Law School in New York. “In terms of verdicts its been a mixed bag.”

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What has emerged from the trials so far is the basic footprint of the two sides’ approaches:

– Plaintiff lawyers have assembled a dossier of company e-mails, studies and sales materials they hope will prove to jurors that Merck put profits before patients by marketing a painkiller it knew was dangerous. The steering committee for trials to be heard in federal courts has gone so far as to create a how-to kit for Vioxx suits, which lays out how to use all the important evidence in the case. – Merck lawyers counter with executives and experts to back the assertion that the company acted responsibly by pulling Vioxx off the market in 2004. That came after a study showed the risks of heart attacks and strokes doubled for patients using the drug for more than 18 months. They also have attempted to plant doubt in the minds of jurors about whether health problems such as high cholesterol or excess weight were the true cause of Vioxx users’ ailments.

Still, a New Jersey jury awarded $13.5 million in compensatory and punitive damages in March to a man who suffered a heart attack while taking Vioxx even though he had numerous preexisting health problems. But another plaintiff at the same trial, who said he took Vioxx for more than 18 months but couldn’t substantiate it, was awarded only $45 as compensation for the cost of his Vioxx.

Twelve additional trials have been scheduled for the rest of this year, including at least eight cases where the plaintiffs took Vioxx for longer than 18 months, their lawyers said.

Ted Mayer, Merck’s lead outside lawyer, said a claim of taking Vioxx for 18 months doesn’t equal proof. But a series of losses in those trials could push Merck to think about settling suits brought by long-term users, said Howard Erichson, a professor at Seton Hall Law School.

Deciding how and when to settle cases is difficult because an agreement doesn’t always mean the litigation is over, experts said. Settlement talks also often ignite a stampede to the courts to file cases.

Consider the case of drug maker Wyeth. In 1999, it announced it was setting aside $3.75 billion for a global settlement for the diet drug combination fen-phen. By the fourth quarter of 2004, the amount it had reserved soared to $21.1 billion because Wyeth underestimated the number of suits. It has spent all but $5.7 billion of those funds.

Merck’s stock has been on an upswing in recent months but is still 23 percent below where it was ahead of the Vioxx withdrawal.

Analyst Jason Napodano of Zacks Independent Research said he won’t recommend that investors buy Merck’s shares until there is a Vioxx settlement because the litigation creates uncertainty. Yet he looks at the Wyeth situation and understands Merck’s reluctance.

Experts said Merck is unlikely to take part in settlement talks until at least September because that will mark the two-year anniversary of Vioxx’s removal. The statute of limitations for filing lawsuit expires after two years in most states.

But plaintiff lawyers don’t expect a Merck retreat. “If we have to try 10,000 cases so be it. We’re ready,” said Andy Birchfield, a Montgomery, Ala., lawyer who co-heads the Federal plaintiff steering committee.

Plaintiff lawyers note some potentially strong evidence may yet become available for use in court cases. In May, attorneys are slated to depose Dr. David Graham, the Food and Drug Administration whistleblower who testified at congressional hearing in 2004 that his agency failed the public in its handling of Vioxx. He also estimated that Vioxx triggered as many as 160,000 heart attacks and strokes.

A raft of new documents from Merck are expected to be given to plaintiff lawyers as early as next week because a federal judge rejected Merck’s request to keep the information confidential. Mayer said Merck intends to continue fighting the release of the documents, but also said he doubted they would yield much for plaintiffs.

Birchfield conceded it was unlikely the boxes would provide a “smoking gun,” but said there could be information to bolster the cases.

There also is the possibility of a criminal investigation into Merck’s actions, which could turn up new evidence. In New Jersey, state law requires that punitive damages cases be referred to the county prosecutor and the state attorney general’s office for investigation into whether a criminal act was committed.

“The attorney general has a hammer we don’t have,” said New York-based lawyer Chris Seeger, the other head of the steering committee. “A lot can come up. There are a lot of balls in the air.”

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