As anticipated by this prior post, a Brazoria County jury found that Merck & Co. was liable for $253 million in damages ($24 million in actual damages, plus $229 million in punitive damages) as a result of its negligence in the death of a 59-year-old Robert Ernst, who at the time of death was taking Merck’s prescription painkiller Vioxx that over 20 million Americans took regularly before it was pulled from the market last year over concern that it might cause increased risk of strokes and heart attacks. The prior posts on the Merck/Vioxx trial are here, here, and here.
Inasmuch as Merck is currently facing another 4,200 Vioxx lawsuits, the verdict is not exactly a rousing start for Merck in the defense of the lawsuits. Merck’s defense in the lawsuit seemed to be reasonably strong — that is, Mr. Ernst, who had only taken Vioxx for eight months, died of arrhythmia that Vioxx has not been shown to cause. However, the Brazoria County coroner testified — over Merck’s strenuous objection because of the plaintiff’s failure to designate the coroner as an expert prior to trial — that Mr. Ernst’s arrhythmia could have been caused by a heart attack. That testimony seemed to hurt Merck badly, as the Chronicle interviewed an alternate juror who had been dismissed from the trial immediately before deliberations began who remarked that Merck “wasn’t doing the right thing by marketing the drug the way they were.” Plaintiff’s lawyer Mark Lanier accused Merck of dragging its feet after the Food and Drug Administration told it in late 2001 to put a label on Vioxx warning of potential heart risks, and during closing arguments, Mr. Lanier contended that Merck saved $229 million by waiting months to add the warning label. Not surprisingly, that’s the amount of of punitive damages awarded by the jury.
Estimates of Merck’s potential liability in the Vioxx cases range from $4 billion to $20 billion, which could be as large as a third of Merck’s market capitalization. Although the price of Merck’s shares dropped 8% today on the news of the verdict, that’s not as bad as the 25% plus decline that occurred last September on the day Merck withdrew Vioxx from the market. Moreover, media reports on the jury’s verdict have not differentiated between the plaintiff’s economic and non-economic damages, but that distinction will be important to Merck’s ultimate liability in this case when the court applies Texas’ statutory cap on punitive damages to the jury verdict. You can be reasonably certain that the ultimate amount recovered will be far less than the jury verdict. Given that, and in view of the fact that Brazoria County is going to be one of the more plaintiff-friendly jurisdictions for a Vioxx trial, the market may be overreacting a bit to the verdict, although that’s about the best spin that Merck can put on this result.
As usual, Professor Ribstein has insightful comments on the absurdity of all this, as does Ted Frank, Professor Bainbridge, Kevin M.D., Derek Lowe, Jonathon Wilson, and Walter Olsen.
This disgusting verdict literally threatens our very lives. The Drug companies will inevitably become more reticent in producing new drugs. Who are these insane jurors? They are almost certainly Democratic government workers who believe in sticking it to ?man.? Most of the us simply cannot afford to sit on a jury. The financial costs can be devastating. This results in the selection of those being compensated by their employer—which usually means the government. I would bet that most of the jurors, if not even all of them, did not sacrifice a mere penny of their salary. What are the odds that I?m jumping to an invalid conclusion? I am utterly convinced that thousands, if not millions of Americans, will suffer and die due to this unjust verdict. We must vote for politicians who will save the pharmaceutical industry. The Leftists are out to destroy them. We cannot allow further harm to occur.
I have one more point to make about the left wing attack on the drug companies. Next week, the movie ?The Constant Gardener? is being released. The story apparently revolves around drug companies murdering people to increase their profits! This is how bad the situation is deteriorating.
David, there is no question that you are correct that the negative effect of the campaign against Vioxx hurts far more people than it helps. The jury’s verdict in these types of cases is based far more on resentment than actionable conduct, a very similar syndrome that we see from juries in white collar criminal cases against defendants that the government and media demonize before trial. Given the societal forces at work here, my sense is that the chance that politicians will be a force for positive change in this area are about the same as my chances of winning the most handsome cowboy contest at the Bluebonnet Dance Palace on Saturday night — i.e., not much.
$253 million Texas Vioxx verdict
$229 million were punitives. (AP/Forbes, AP/BusWk, Reuters, W$J). Ted posted on the case Jul. 11 when the trial opened. Jim Copland and Jonathan Wilson comment at Point of Law, which has given the issue extensive…
The Merck verdict
Merck’s quarter billion dollar loss displays a lot that is bad about both corporate governance and tort litigation. The verdict was hardly surprising. As reported here, the plaintiffís case featured resentment-mongering against executive pay and corp…
?Seven jurors had only high school educations, while two went to college for two years and one for four. The other two didn’t indicate where their education stopped.?
—Houston Chronicle
The formal educational level of the jurors indicates that they could easily be persuaded to believe that the pharmaceutical companies are enemies of the common people. Their verdict was almost certainly based on envy and resentment. My guess is that the two jurors who dissented from the majority are Republicans. The other ten are solid Democrats.
Republicans sometimes act hypocritically and less than admirably, but they are our only hope. The Democrats are controlled by the trial lawyers and the radical left. They must be stopped. Our very lives depend on it.
That clicking sound you hear is the sound of your own health insurance premiums being raised. The company will either raise prices to cover the judgement, or will go bankrupt. Either way, drugs will get more expensive.
Another question: if the government were to impose Canadian-style health care on the US, would lawsuits like this be impossible?
ON a side note, anyone know where I can trade my own life for $25 Million (I read that Texas law will cap the punitive damages part at $1.65 Million)? I’m sure my wife and kids would agree to the swap as well.
Blame the Jury
Vioxx jury awards widow $253 million Warning: Snark overload here … I just recoil in endless irritation when I see the coldhearted explanations of how this news is supposed to make me feel sorry for Merck. I’ll admit, I don’t…
What I don’t understand is why nothing has been said — especially by defense lawyers in their post-verdict press conference — about the fact that the jury was not unanimous on liability but instead was 10-2. And under Texas law, at least it is my understanding, punitive damages — or what Texas calls exemplary damages — can only be awarded if the jury is unanimous. See Tx. Civ. Prac. & Rem. Code 41.003.
I am wrong or is this the elephant in the room?
John, that provision of the Civil Practice and Remedies Code applies only to lawsuits filed after September 1, 2003. Although I do not know the date on which the Ernst lawsuit was filed, I am presuming that it was before that date. Nevertheless, you are correct that the punitives will be reduced to just a fraction of $229 million, which is one of the reasons that I think the market is overreacting to the verdict a bit.
The Merck verdict
Merck’s quarter billion dollar loss displays a lot that is bad about both corporate governance and tort litigation. The verdict was hardly surprising. As reported here, the plaintiffís case featured resentment-mongering against executive pay and corp…
Monday Morning Quarterbacks
Starting Friday afternoon when news of the $253 million Merck Vioxx verdict hit the wires, the press feeding frenzy started. The intrepid reporters at law.com were on it, not once but twice. Other great coverage is available from Tom Kirkendall and …
“That clicking sound you hear is the sound of your own health insurance premiums being raised. The company will either raise prices to cover the judgement, or will go bankrupt. Either way, drugs will get more expensive.”
Your insurance premiums are far more likely to be increased by the multiple class actions filed by doctors against health insurers for failing to reimburse them. Already nearly a billion has been paid in settlements, with a couple of trials scheduled for this fall.
I guess you hadn’t heard about those.
Matt is correct that lawyers are doing many many other things besides Vioxx lawsuits to increase the cost and reduce the quality of healthcare in the US.