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Drug Giant's Liability May Pass $18 Billion, Some Analysts Predict

Posted on: Monday, 22 August 2005, 21:00 CDT

ANGLETON, Texas - The huge jury award to a plaintiff in the nation's first Vioxx case is likely to inspire thousands more suits on top of the 4,200 already filed against the drug's maker Merck & Co. and push liability estimates that reach $18 billion even higher, analysts said.

Merck & Co.'s stock sank $2.35, or 7.7 percent, to close at $28.06. The jury awarded $253.4 million in damages to a widow of a man who died in 2001 of heart arrhythmia, or irregular heartbeat, 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.

"This is really bad. It is such a blatant decision that says Merck did not do the right thing about protecting patients," said David Moskowitz, an analyst at Friedman, Billings, Ramsey.

Some of the other cases are presumably stronger than the Angleton case. Now lawyers and analysts are expecting a flood of new suits. Merck has set aside $675 million to fight them but analysts think it may have also need to reserve funds to pay verdicts.

"Plaintiff lawyers are sharks and they smell blood," said David A. Logan, the dean of Roger Williams University School of Law.

U.S. Food and Drug Administration researcher David Graham published an article last year in the British medical journal, The Lancet, that said that between 88,000 and 140,000 people suffered serious cardiovascular events related to Vioxx. Plaintiff lawyer Mark Lanier said the verdict has emboldened more of those people or their families to file suits.

"My message to Merck is that I'm just warming up," said Lanier.

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.

Source: Charleston Gazette, The

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