Merck’s Vioxx Liability: The Death of Big Pharma?

A staggering verdict was found in Angleton, Texas against pharmaceutical conglomerate Merck & Co. when the jury today handed back $24 million in actual damages plus an additional $229 million in exemplary, punitive damages for the widow of former Vioxx patient Robert Ernst.
The background story is that triathlete Robert Ernst had been on the prescription heart drug Vioxx and then died of what the coroner later described as “arrhythmia” or an irregular heartbeat. Ernst’s widow’s attorney argued that Vioxx had led to a heart attack that had caused the arrhythmia, not the direct death.
While Merck voluntarily removed Vioxx from the marketplace last September after studies linked Vioxx to a higher rate of heart attacks and strokes after taking the drug for 18 months, it was too late for thousands of potential victims. Ernst is the first of over 4000 lawsuits alleging injuries from Vioxx.

If this one case produces a verdict of almost $255 million, then even if only 10% of the 4000 cases already filed were settled in favor of the plaintiff, not Merck, it could theoretically cost upwards of $100 billion, a crippling blow to one of the largest pharma companies in the world.
The verdict wasn’t just based on the medical evidence, however. The jury ruled against Merck on three key questions: Merck failed to warn doctors of the dangers of Vioxx, that the drug was improperly designed in the first place (and that’s going to be just about impossible to recover from and significant fuel for attorneys representing other clients), and finally that Merck’s negligence caused the death of Robert Ernst.
Merck, of course, is going to appeal, but the writing’s on the wall, and the implication for big pharma overall is clear: you can’t risk developing new drugs at all, ultimately, because even with the best disclosure mechanisms and the best communications strategy, you can find that the little speed-bump in the testing phase comes back as a 500-foot monster and, like this Vioxx settlement, might just crush your firm.
Oh, and I don’t believe that Merck is exemplary in its communications, but it is important to recognize that they are wrestling with the problem all companies face: shareholder value or transparent communications?
I believe that this verdict will hasten product liability reform and caps on limitations on verdicts. Otherwise we’ll see that all big pharma will eventually be crushed by some drug problem or another and that we’ll end up with much less pharmaceutical innovation. Given that I believe that as a population we are becoming less healthy, and that without the continuing evolution of pharmacological medicines, we’ve got a really big public health problem coming in a decade or two.
There’s no disputing that this is a significant verdict against Merck. But what do you think about the implications for the industry, and for the state of public health?
Reference reading:

15 comments on “Merck’s Vioxx Liability: The Death of Big Pharma?

  1. Vioxx and all the COX-2 inhibitors were designed on the basis of junk science. The major failure here was the usual treating of symptoms without understanding the cause of the symptoms.
    If you don’t attack the cause, you are no smarter than a puppy chasing it’s tail. COX-1 and COX-2 are produced where inflammation occurs, inflammation being a normal body process used to heal injuries. Most of the people I deal with have arthritis and other problems due to the really bad diets they consume combined with lack of exercise. This eventually puts their body into a self-destructive autoimmune inflammation process that will not be fixed by attacking the inflammation process itself, but by reducing caloric intake, increasing exercise and eating less processed/refined foods. Not a message most people want to hear, but if I eat the way my friends do, then I go arthritic. If I follow proper diet and exercise, the pain goes away without NASAIDS or COX-2 inhibitors.
    The major problem for Merck and friends is that they cannot sell diets and in most of their advertising, they paint a rosy path where the drugs produced vastly improve your life with no side effects. Having had several friends nearly die of bad drug interactions makes me really question most of the new stuff on the market today. It is not really being tested and often does not work better than the older prescribed medicines. It just costs more with worse side effects.
    One of the worst causes of inflammation today is high blood sugar combined with insulin resistance (type II Diabetes).

  2. While this is certainly a challenge for pharma and innovation, I think on appeal Merck will win out on the scientific portions of the judgement. It would make it very hard for new classes of drugs to come out if there is a fear of this kind of suit. As far as the COX-1/2 debate. There is a bias in most medications towards symptomatic “cures”. It is changing, though. For example the new TZD class of medications for Type-2 diabetes helps the body to use insulin more effectively by reducing insulin resistance.

  3. Great observations Dave. It’s not only Merck that locked into its business model 2 decades ago but all of the pharma industry. That model won’t work well going forward. The Vioxx case is another in a long string of cases telling the INDUSTRY it must change it’s business model. Otherwise everyone (investors, suppliers, employees and customers) are going to feel a lot more pain.

  4. I thing there is a real ‘plague on both your houses’ in this case. From what I read, it is clear that Merck acted in a deceptive manner, and suppressed evidence about the drug’s side effects.
    However, according to the WSJ article that I skimmed on this, the jury *did not listen* to the scientific content to the Merck case, which certainly seemed persuasive to me.
    I cannot fathom how effective justice can be rendered by a jury which does not listen [and perhaps cannot understand] key issues of the case.
    To paraphrase the Duke of Wellington: “I don’t know if this scares you, sir, but it certainly scares me”.
    PS: The addition questions are getting too hard for my little brain — I just failed one!

  5. The pharmaceutical industry makes billions of dollars drugging school children and this is a form of genocide: condemning millions of young lives to a drug addicted future. They employ �experts� and lobbyist and hire ex FDA personnel and retired congressman to get pro-drug legislation passed. Newspapers and magazines receive billions of dollars a year in advertising, and investment firms make big bucks touting the latest snake oil; so it would be a rare article indeed that went against Big Pharma. The industry is motivated by the bottom line and shareholders not Science. A Google search of Ritalin and Cocaine, Prozac, chemical imbalance, school shootings, will show even the most skeptical that something is horribly wrong when 6 million school children ( plans are in place to increase this by 40% each year) are on anti-depressant drugs prescribed to handle �disorders� created to sell the drugs. Now after the Texas Vioxx decision Big Pharma’s stooges are flooding their editorial outlets ( USA Today, the New York Times, Wall Street Journal) with demands that the government protect the drug companies. Michael
    PS The decision by the Texas jury was rendered because the defendant couldn�t explain their faulty �science� to the common man. Something that contains lies is very hard to explain as it gets very complicated whereas that which is true is simple and easy to explain.

  6. As Michael mentioned handing those shady anti depressant drugs to children, that is a real crime.
    For a while I consumed large amounts of MDMA / Ecstacy. Normally the next day I would just feel burnt out, but when you did it too much there were some weird side effects as well, like jaw clenching, whoshing sounds, tracers, electric zaps, and eventually it can sometimes lead to emotional numbness.
    I also took 5HTP for a while, which is a way to boost your serotonin intake. I found that if I did it too frequently at too high of doses it too led to that emotional numbness.
    Many people are depresses because that is just a natural life curing mechanism. When you feel like crap it is your body telling you to change something.
    Some of the people who take those anti depressant drugs are addicted to them, both physically and psychologically. I have posted about 500 feedbacks various people have left about them.

  7. People? What part of – “All Drugs are not safe.” doesn’t anyone understand? Taking any kind of drug – ANY KIND — poses inherent risks. No drug company can possibly know how a drug will interact with each individuals chemistry. I find it laughable that we as a society have come to demand both new and improved drugs that will cure our ailments AND demand that those same drugs are RISK FREE.
    As lawsuits continue to erode both the willingness of companies to make ANYTHING that carries the possiblity of being sued for it, and of consumers who don’t think they have a RESPONSIBILITY to understand the inherent risks in taking a drug, using a hair dryer near water or flying a plane while drunk. Don’t believe me? One only has to look at this page to see the sad state of our society:

  8. I go at this issue from a different direction.
    How is the interest of the public served by giving a lady from Texas and her lawyers $253M!?
    If courts are going access large punitive damage awards, that money should be spent directly addressing the issues of the case. Let’s give the money to the CDC for medical research, for example. This nation badly needs tort reform but it will never happen as long as our legislative representitives are predomently lawyers.

  9. I agree with Andrew-well said. Tort law has given people who take no responsibility for their actions the right to become rich. We sue over every imagined wrong done to us . We need to stop blaming the drug companies, who have produced many life saving and life improving medicines-and reform the testing methods and approval process so that new drugs are as risk free as possible. Nothing however, is totally risk free.

  10. I totally agree with Angela, but…this case isn’t solely about unfortunate side effects! It’s about a drug company hiding or not revealing important information about their product! Why?? because it was making them lots & lots of money. they didn’t give the thousands of people who were prescribed them a fair chance to decide whether they were willing to take the risk! My Partner was 44yrs old when he was wrongly diagnosed with rheumatoid arthritis, he was prescribed dangerous liver damaging drugs for 9 months, only to be told “stop the drugs immediately” you have fibromyalgia! A “mistake” had been made – ok… so to help with the pain of “fibromyalgia” vioxx are prescribed – we were so pleased he wasn’t on the dangerous drugs anymore! A month after his 46th birthday he had a triple heart by pass operation! We have only just realised why!! and if we’re right, I think we should be compensated for the destruction of our lives…caused by greed! Oh by the way we’re not one of the 9,600 American victims of vioxx, No, unfortunately we’re English so we have to wait until all the American trials are dealt with before we can be heard! By that time merck will be in our position… broke!

  11. If the company hid facts they should be forced to pay damages to anyone who was harmed. I have less concern for companies who claimed they were harmed, there was a class action suit just thrown out against insurance companies who were trying to be reimbursed for buying the drugs for their clients. I have less sympaythy for these guys, after all, they would have been buying comparibile drugs for thei memebers if prescribed.

  12. I am a Vioxx Survivor, I filed a RICO Complaint on Merck & Co. in June 2007, The case is now in the 5th circuit court of appeals waiting for the panel of Judges to rule on the order for Nihil Dicta Judgment Merck defaulted by not responding to the Interlocutory appeal.The Judgment is triple the damages and not a product liability case. For more information you can contact me.

  13. The RICO case in the 5th circuit was dismissed, I then took it to the United States Supreme Court in Washington DC. It was denied a review. I guess the Judges did not think it was important enough and since I could not pay the court cost they denied it. Merck is “intra vires” the Courts claim disambiguation deference “Beyon the Powers”
    I say Merck is ” Above the Law” and “Within the Power” Congress omitted the Law by preempting the FDCA Act in 1962. They omitted Product Liability for any remedy for a Consumer who is injured or killed by a Defective Prescription Drug. No Law, No Federal Law and No State Law. This placed a shield of protection for prescription drug companies and leaves the American Consumer at risk. in 1962 Senator Edward M. Kennedy was newly elected as Senator and appointed to the Health and Human Services. He became the Expert oversight committee and amended the Federal,Food, Drug and Cosmetic Act. Intentionally omitted the Product Liability for Prescription drugs and Medical devises. Mis-led Congrss over the years with the FDAAA to the FDA Acts and Public Laws that would protect the public. Instead Congress has continued to allow the shield of protection for defective prescription drug manufactuing Companies. Merck is immune from prosecution for injuring and killing. This is a “conflct of Law” A violation of the Legislators when they affirm to the United States Constitution and their Oath of office. “Equal Protection of the Law.”
    Merck’s Exe.CEO’s knew this and produced a Toxic pill called Vioxx with neglegance and Fraud did falseify documents presented to the FDA and others and did know this drug was going to kill and injury many thousands of American Consumers in the process of producing it and pubic advertising it and promoting it for the greedy purpose of making Profits for their Shareholders and their Stockholders.Merck & Co. left this killer toxic pill on the market for 5 years against the warning letters and the threats from the FDA. Why? did this happen? How many lives have been distroyed? For What purpose? You answer the Question??? No Law…. No Court in the United States can prosecute or make Merck accountable for all the injury or deaths. {Ref. FDCA Act Public Law 1962.}”Beyond the power and Within the Power.”

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