A Texas jury dealt a painful blow, finding the drug maker liable for a Vioxx patient’s death and slapping it with $253 million in damages. With about 4,200 more Vioxx lawsuits to go, the verdict was an ominous start for Merck.
In the Texas suit, the first focus on Vioxx’s health risks since its removed from pharmacy shelves last September, the widow of Bob Ernst, a 59-year-old triathlete, argued that Vioxx cause his fatal heart failure in 2001. Merck’s defense was that Mr. Ernst died of arrhythmia not caused by the arthritis-pain drug. Its case seemed reasonably strong; though Vioxx has been shown to cause heart trouble, it has not been shown to cause arrhythmia. And Mr. Ernst had only taken Vioxx for eight months before his death. But a coroner testified that Mr. Ernst arrhythmia could have been caused by a heart attack, shooting a big hole in Merck’s defense. Before the verdict, the Houston Chronicle reported that a dismissed alternate juror in the case, Raul Hernandez, said plaintiff’s lawyer Mark Lanier “put up a pretty good presentation” and that Merck “wasn’t doing the right thing by marketing the drug the way they were.” Mr. 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. Mr. Lanier said Merck saved some $229 million by waiting months to add the warning label– the exact amount of punitive damages awarded by the jury. Merck said it plans to appeal.
Considering the relative strength of Merck’s case in this lawsuit, the attorneys in the other 4,200 were probably rubbing their hands together with glee today. Andy Birchfield, who represents Vioxx plaintiffs in the first federal trial, scheduled for November, told MSNBC that the Texas verdict “says we can go in and prove that Vioxx caused these injuries.” Estimates of Merck’s potential liability in the case range from $4 billion, or about a third of its total stock-market valuation. Its shares, which dropped 27% on the day it withdrew Vioxx, fell about 8% today. Oppenheimer analyst Scott Henry warned that investors may be overreacting to the verdict, noting that Texas has a history of generosity to plaintiffs. Still, he was keeping his “neutral” rating on Merck’s stock, saying it still had plenty of other headaches, including expiring patents on blockbuster drugs.