Merck Loss Likely to Increase Liability, Number of LawsuitsAug 19, 2005 | AP
Merck & Co. suffered a serious blow Friday when it lost the first wrongful death lawsuit against it over its painkiller Vioxx, opening the floodgates for additional lawsuits and raising the risk that liability will climb higher than estimates that reach $18 billion.
Merck & Co.'s stock sank $1.16, or 4 percent, to $29.25 after the jury awarded $253.4 million in damages to a widow of a man who died in 2001 of heart arrhythmia, or irregular heart beat, after taking Vioxx for around eight months. The company plans to appeal.
Merck yanked the popular pain reliever from the market last September after a study found it doubled patients' risks of heart attacks and strokes after 18 months.
The loss is especially damaging because Merck initially had been expected to win what was considered a weak case because no studies have linked Vioxx to arrhythmia. And the next two cases Merck faces appear somewhat stronger, according to experts.
"If they can't win the weak ones, what does that say about the strong ones?" asked Anthony Sebok, a professor at Brooklyn Law School.
Analyst Jason Napodano Zacks Investment Research said now anyone taking Vioxx with any type of a cardiovascular problem will feel emboldened to file a lawsuit. So far, more than 4,000 cases have been filed, some presumably stronger than the Angleton case. Merck has set aside $675 million to fight them.
"A Merck loss means that the number of cases against them increases tenfold," predicted Napodano.
If this verdict marks the beginning of a losing streak, Merck may back away from its pledge to try each case individually and not settle any, experts said. But they said a rash of verdicts would be necessary before the company changes its strategy.
"Merck says there will be no surrender. But you have to wonder if that will be true," said Sebok.
The plaintiff's lawyer, attempted to convince the Angleton jury that the plaintiff's late husband, Bob Ernst, died of a heart attack. Lanier flew Dr. Maria Araneta, who performed Ernst's autopsy, in from the United Arab Emirates, where she had moved since performing the autopsy in 2001. She testified that although her report said Ernst died of an arrhythmia, it was likely he had a heart attack.
"I'm not changing my opinion, I'm just explaining it further," Araneta testified. "That's the autopsy report, but it's not the end of the story."
She said Ernst probably had a heart attack because a clot blocked the blood flow in an artery that was already clogged with plaque. She also said CPR conducted on Ernst probably dislodged the clot.
Lanier's case provided other plaintiff lawyers with a blueprint for how to prove Merck behaved irresponsibly in promoting Vioxx, said Benjamin Zipursky, a professor at Fordham University School of Law.
"A Merck loss means the jury believes the plaintiff story about the company's wrongful conduct," said Zipursky. "That carries into the future."
Merck would be foolish to dismiss Lanier's win as a fluke resulting from a talented Texas lawyer working his abundant Southern charm in what is considered a plaintiff-friendly venue, attorneys warned.
The winning attorney is an extraordinarily gifted attorney. But there are a lot of other gifted plaintiff attorneys and other favorable venues," said Charles Rhodes, a law professor at South Texas College of Law in Houston. "Maybe Merck will get less damages outside of Southeast Texas, but there will still be damages."
Next month, Merck faces a trail in Atlantic City, N.J., brought by Michael Humeston, a former postal worker, who had a heart attack in 2001. Humeston's lawyer, Chris Seeger, said Humeston still has lingering effects from the heart attack. Vioxx has been directly linked to heart attacks.
In November, the first of 1,800 federal cases will be heard in New Orleans. It revolves around Richard Irvin, a Florida man who was taking Vioxx for a month before his 2001 death from a blood clot in his heart. Scientists have speculated that Vioxx causes cardiovascular problems because it blocks a substance which keeps blood from clotting.