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Vioxx trial jury awards $9 mln in punitive damages

Posted on: Tuesday, 11 April 2006, 12:10 CDT

By Anna Driver

ATLANTIC CITY, New Jersey (Reuters) - A jury on Tuesday awarded $9 million in punitive damages to a New Jersey man who blamed Merck & Co. Inc.'s Vioxx for his heart attack, but the company vowed to continue fighting cases involving its withdrawn pain medicine.

That comes on top of last week's award of $4.5 million in compensatory damages to 77-year-old John McDarby by the jury that found Vioxx was a significant contributing factor to his heart attack and that Merck failed to adequately warn of the drug's risks.

In order to award punitive damages, the jury of six women and two men in New Jersey Superior Court needed to find that Merck withheld material information on Vioxx from the U.S. Food and Drug Administration, and that the company's actions were deliberately meant to harm.

"This is the first punitive damage verdict in New Jersey since the punitive law was changed 11 years ago. That's phenomenal," said McDarby's attorney Rob Gordon.

Under state law, punitive damages -- awarded as punishment to rectify a wrong committed by a defendant -- were capped at $22.5 million, or five times compensatory damages.

Shares of Merck, which said it would appeal the verdicts, were down 19 cents to $34.23 on the New York Stock Exchange.

"I'm surprised investors are not greeting this with more pessimism," said Scott Henry, an analyst for Oppenheimer & Co.

"It is only one data point among many, but in no way is this a positive development. These awards will re-motivate the plaintiffs' lawyers," added Henry.

Prudential Financial analyst Timothy Anderson said Merck could now be looking at legal costs comparable to what Wyeth has faced with its withdrawn "fen-phen" diet drugs. Wyeth has already taken some $21 billion in charges.

"Seeing as there are 10,000 Vioxx cases already filed, with more likely on the way, Merck's Vioxx liability could end up being larger than we have previously anticipated if more verdicts are handed down similar" to this one, Anderson said.

Merck expressed disappointment over the jury's decision but gave no indication that it was willing to consider settling some of the cases it is facing.

"We are in this for the long haul," said Merck spokesman Chuck Harrell, adding Merck would continue "to defend these cases on a case by case basis."

He said Merck planned to not only appeal the punitive damages, but also last week's split verdict, in which the jury found for Merck in the case of another plaintiff, Thomas Cona, in the trial that combined two cases of long-term Vioxx users.

Harrell said he believed the judge applied the law incorrectly throughout the trial and that the jury was not allowed to hear all the evidence that they should have.

A juror who acted as spokesman for the jury said that the group had rendered a "fair and honest verdict."

McDarby's wife, Irma, told reporters: "We feel justified." Now my husband "can get the care he needs."

As part of its deliberations, the jury considered whether Merck intentionally withheld from regulators an analysis of several clinical trials done by a company statistician in 2000 that showed a higher incidence of heart attacks among patients taking Vioxx than among patients taking other drugs.

Merck said it did not submit that heart attack analysis as part of its submission of the study in 2001 because it said it was "statistically invalid."

Merck, which is based in New Jersey, where about half of the Vioxx cases have been filed, pulled the $2.5 billion-a-year drug off the market in September 2004 after a study showed it doubled the risk of heart attack and stroke among those who used it for at least 18 months.

The company has maintained it took the action as soon as it had clear evidence of the increased heart risks.

Mark Lanier, Cona's lead attorney who won a Vioxx case for a Texas widow last year said: "This jury has sent a message out from the back yard of pharmaceutical land that they take their policing power seriously."

(Additional reporting by Lewis Krauskopf and Susan Kelly)

Source: REUTERS

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