Vioxx DecisionAug 19, 2005 | CNN BLITZER: There's breaking news we're following right now in a major drug liability case, a Texas jury only moments ago has just found the giant pharmaceutical company, Merck, responsible for the death of a man who took their now pulled painkiller Vioxx.
Our Business Correspondents Ali Velshi and Allan Chernoff both standing by with details of what has just happened, let's start with you, Allan. What happened?
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Wolf, this is a huge defeat for Merck because on the face it appeared that this actually was a relatively weak case against Merck, the pharmaceutical giant.
You'll recall that Merck had withdrawn Vioxx last year after studies showed it could cause heart attacks or stroke in people who took the drug for more than 18 months.
Well, the person who passed away here back in April of 2000, Bob Ernst, had taken the drug for only eight months and he did not have a heart attack or a stroke according to the coroner. Nonetheless, the jury here has found Merck liable for his death and awarded his widow a total of $253 million, $24 million of that in mental anguish, $229 million of that punitive damages against Merck.
Bob Ernst, the person who passed away, he was a manager at a Wal- Mart, so he did not have a very large salary at all. Nonetheless, a huge victory for the plaintiffs here, Merck suffering a major defeat and this really could open the floodgates for more lawsuits against Merck regarding Vioxx.
There are already about 4,000 lawsuits against the company and this clearly would encourage other people to file suit against Merck, a big defeat for the pharmaceutical company, Wolf.
BLITZER: Allan, stand by.
Ali Velshi has also been following this very important trial. Ali, give us your thoughts on what has just happened.
ALI VELSHI, CNN CORRESPONDENT: I think Allan put his finger on it. This wasn't thought to be as big a deal as it was for Merck because there are a lot more of these lawsuits following it. This is not good news for Merck but it seems to the markets seem to be reacting in a way that expected it.
Allan, one of the things about Texas is the old Fen-Phen trial, the old American Home Products, which has now become Wyeth. There was a $900 million punitive award, punitive damages awarded to the plaintiffs there.
Texas has a law that caps punitive damages. It's typical that this kind of thing would be pared down that the punitive damages of 200-plus million dollars is probably going to be pared back.
CHERNOFF: Sure, most likely that that number would be pared down without question but here clearly the big news is that Merck has lost the case and this was a case that on the surface, again, Merck seemed to have a very simple argument and it clearly would have argued that Bob Ernst simply didn't apply, wasn't one of these people who should have been a victim of Vioxx according to Merck's scientific studies.
But, the jury has clearly gone against Merck and a huge victory for the attorney Mark Lanier. He's a relative young man but considered one of the top litigators in the country and he took this case on several years before Merck had pulled Vioxx from the market. After Merck did pull Vioxx then the flood of lawsuits came in. So, Wolf, again we're going to really see a lot more lawsuits being filed now against Merck. There's no question about that.
BLITZER: Ali, before both of you wind up just remind our viewers about this controversial painkiller Vioxx. Merck on its own voluntarily pulled this painkiller in the face of some studies.
VELSHI: Yes. The issue is how much Merck knew about the dangers associated with Merck with Vioxx. It's a painkiller. It was widely prescribed as an arthritis drug but it was commonly prescribed to people as a sort of a more effective drug than the over-the-counter painkillers that were out there.
Well, what happened is it turns out that after some people suffered heart attacks the investigations led to some understanding that Merck might have known there was a risk and not and as limited as that risk may have been not clearly articulated that risk to people who bought and used the drug regularly. It did become a very popular painkiller.
It's a class of painkillers. There are other ones on the market that were also pulled as a result of it. The issue here is how much pharmaceutical companies have to disclose in terms of the risks that they know of when they market a drug like this, Wolf.
BLITZER: All right, Ali and Allan stand by. We're going to get back to both of you during the course of this program.
And just to recap, a Texas jury has ruled against the giant pharmaceutical company Merck and Company, liable now for $253.4 million damages and other expenses, the result of the once very popular painkiller Vioxx, more on the story coming up.