Merck fights each lawsuit but the costs are adding up

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vioxx(Houston Chronicle (KRT) Via Thomson Dialog NewsEdge) Nov. 28--In September 2004, when pharmaceutical giant Merck withdrew its best-selling painkiller Vioxx amid concern over potentially fatal side effects, many of the nation's plaintiff lawyers were wide-eyed with anticipation.

Ominous headlines had circulated for years, prompted by studies that indicated Vioxx increased the risk of a heart attack or stroke. Merck's decision to withdraw the drug from the market, despite annual sales of $2.5 billion, was an invitation for lawsuits.

A trickle grew into a steady stream and eventually a torrent of litigation. The plaintiffs' prospects looked good, especially after the New England Journal of Medicine published an editorial accusing Merck of concealing heart attacks suffered by individuals who were part of a Vioxx study reported in the prestigious magazine in 2000.
Those prospects looked even better in August 2005, when a Brazoria County jury awarded widow Carol Ernst $253 million in the country's first Vioxx trial.

"A very bad day for Merck," one industry analyst said.

In the months since, however, the great Vioxx turkey shoot has not materialized. Merck's strategy of taking every case to trial has resulted in more victories than losses. A Nov. 15 jury verdict absolving Merck of blame for the heart attack of a 61-year-old Utah man was its seventh win overall and third in four federal trials. Another 10 cases set for trial have been dismissed.

Merck views those as wins, too, because the suits either cannot be refiled or aren't likely to be.

"You can never predict what one individual jury will do -- there are some ups and downs -- but we like our chances before a jury," said New York attorney Ted Mayer, who is overseeing Merck's nationwide Vioxx litigation. "We do believe strongly in our message. We're encouraged that some of the juries are responding."

Mark Lanier, a Houston plaintiff lawyer who represented Ernst and notched another big Vioxx win in New Jersey in April, said it is too early to sense a trend in the litigation and added that Merck's recent triumphs don't discourage him.

"Anytime you've got a mass tort action, historically the plaintiffs lose a lot of the first 10 to 12 cases," he said. "It takes you awhile to read through 8 million documents, learn the science and the scientists who invented the drug, and get the company's story all lined up."

Lead attorney's position

Merck's lead lawyer in the federal trials, which have been consolidated into one court and are taking place in New Orleans, is not buying Lanier's explanation. Plaintiff lawyers don't always do poorly in the early days of mass torts, Phil Beck said. In silicone breast implant litigation, for example, plaintiffs scored some impressive early victories.

"We started out doing fine and expect to do better," Beck said. "We think it's a vindication of the approach the company has taken of trying each of these cases individually."

Lawyers advertised heavily for potential Vioxx clients in the months after the product left pharmacy shelves. Some emphasized the chance to "get your millions" and suggested that some cases might be "slam dunks." To date, more than 40,000 Vioxx lawsuits have been filed.

No easy payday

In truth, there was no likelihood of an easy payday.

Although an estimated 80 million people were prescribed Vioxx, the ones among them who suffered heart attacks or strokes still have to establish that the drug was the cause.

If those individuals also had other risk factors -- obesity, a history of smoking, heart disease in their family -- pinning the blame on Vioxx is a big hurdle even if statistical evidence shows a strong correlation between Vioxx and similar drugs and increased coronary incidents.

"Asbestos, the pregnancy drug DES and some of the diet drugs -- all of those have what are called signature injuries, the type that once you see it you know it was caused by this product," said Fordham University law professor Ben Zipursky, an expert on mass torts and product liability. "There's a million different reasons why you can have a heart attack. That makes the plaintiff's burden of proof much, much harder, and Merck has done a good job of persuading juries that these plaintiffs have not met their burden of proof."

Lanier said Merck's wins have come in cases where the plaintiff's Vioxx use was not consistent, timely or long term.

"Every plaintiff who has lost has not been able to prove that the client was on Vioxx at the time of the heart attack," Lanier said.

In the most recent case, Charles Laron Mason admitted on the witness stand that he had stopped taking Vioxx four days before his heart attack. His lawyers argued that the drug had already done its damage. Beck countered that it would have been out of his system by then and pointed out his other risk factors, including having coronary artery disease and being overweight. The jury deliberated 90 minutes.

In cases where other risk factors were not an issue and the plaintiff could establish long-standing Vioxx usage continuing to the time of the heart attack, juries have been more sympathetic. They have awarded plaintiffs an average of almost $90 million in compensatory and punitive damages, which are limited to instances of egregious corporate conduct.

In the case of Gerald Barnett, a 62-year-old FBI agent, a New Orleans jury was so eager to punish Merck that it gave him compensatory damages of $50 million, a figure so high the judge set aside the award and ordered a new trial to set a reasonable damage amount.

Merck insists it will continue its strategy of trying each case and settling none. Lanier says the company will have to start settlement talks eventually. Refusing to do so, he said, amounts to a different form of lawsuit abuse.

"You can't just say, 'We'll do a few a year and everyone else can wait,' " said Lanier, who has about 2,000 of the approximately 42,000 Vioxx plaintiffs. "It's time for them to say, 'Give us a valid disease and a valid diagnosis and a valid prescription record, and we'll work out a settlement.' "

Breakdown on claims

Lanier estimates 5,000 to 10,000 of the claims ultimately will be dismissed for a variety of flaws and perhaps 5,000 will be "no-brainers" that Merck would be foolish not to settle. The remainder, he said, will be cases in which Vioxx might bear partial responsibility.

"Those are cases where Merck ought to pay some money but not full value because it is not so clear-cut," he said.

With Merck not yet in settlement mode, the trials will go on. Three more are under way. Lanier has a case with several plaintiffs slated for January in New Jersey.

Regardless of when Merck decides to consider settling cases or how much it ultimately has to pay out, there is no chance it will get off easy. Already the company has pumped up its total cash reserve for legal bills alone to almost $1 billion.

With more than $1 million a day going to its lawyers and millions more to be paid in the cases it loses, even if those are the minority, the pressure to develop a settlement formula at some point will be compelling.

"Will that time come? Sure," Zipursky said. "But we're not there yet."