FDAnews Drug Daily Bulletin

MERCK WINS SECOND VIOXX TRIAL; TOTAL LIABILITY STILL DIFFICULT TO ESTIMATE

Nov. 7, 2005
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Merck emerged victorious in the second lawsuit over its withdrawn painkiller Vioxx, but analysts cautioned that - with more than 6,000 cases still pending and many more likely to be filed - the drugmaker is far from out of the woods.

A six-member jury in the New Jersey Superior Court rejected claims by plaintiff Frederick Humeston, a 60-year-old Idaho postal worker who said Vioxx (rofecoxib) caused him to have a heart attack in 2001. Humeston's lawyer argued that Merck misrepresented Vioxx's risks, but the jury found that the company adequately warned doctors and consumers about the drug's safety profile. Merck pulled Vioxx from the market in September 2004 after studies linked it to increased risk of heart attacks and strokes.

The jurors in the Humeston case reached the opposite conclusion of a Texas jury, which in August found Merck liable for the death of a 59-year-old man who took Vioxx. The Texas jury awarded the man's family $24 million in actual damages and $229 million in punitive damages, but that amount is expected to be reduced to $26 million under state law. Merck plans to appeal the Texas verdict.

With Merck splitting the first two Vioxx cases, the task of quantifying the company's total Vioxx liability has become even more challenging, financial analysts said. Such predictions remain "an exercise in futility, in our opinion, but we continue to believe that the company's total legal tab will be less than fen-phen has been for Wyeth," Timothy Anderson, a senior analyst at Prudential Financial Equity Group, wrote in a recent research note.

Wyeth, which lost the first five product liability trials involving fen-phen, has set aside approximately $21.1 billion to cover potential liability costs associated with the diet drug combination. Fen-phen was pulled from the market in 1997 after it was linked to heart problems.

Other analysts, however, believe Merck could face more liability risks than Wyeth, especially if the number of Vioxx lawsuits continues to rise. David Moskowitz, an analyst with Friedman, Billings & Ramsey, has projected that Merck's total Vioxx liability could eventually reach $50 billion.

As of Sept. 30, Merck has been named as a defendant in approximately 6,400 Vioxx-related lawsuits, which include roughly 11,700 plaintiff groups. The number of lawsuits has climbed considerably since Merck lost the Texas case. At the time of the Texas verdict, Merck was named in roughly 4,200 Vioxx-related lawsuits.

Merck said it was "satisfied" with the New Jersey verdict and reiterated that it intends to fight each case individually. "There will be other Vioxx trials and we will vigorously defend them one by one over the coming years," said Kenneth Frazier, senior vice president and general counsel of Merck.