http://www.thestreet.com/_yahoo/stocks/biotech/10238931.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA Merck Loses in Texas By TSC Staff 8/19/2005 3:38 PM EDT Updated from 2:53 p.m. A Texas jury handed Merck (MRK:NYSE - commentary - research - Cramer's Take) a big setback in the first civil lawsuit over its Vioxx painkiller. The jury in Angleton, Texas, ruled after deliberating the case for two days that Merck was negligent in its marketing of the drug and liable for the death of a 59-year-old man. The jury awarded the plaintiffs more than $200 million in damages. Merck said it would appeal, but shares of the big New Jersey drug firm dropped 7% on news of the damage award. The jury had been weighing Carol Ernst's complaint that Vioxx caused the death of her husband, Robert, who took the drug for eight months to alleviate pain in his hands. He died suddenly in 2001. Carol Ernst claims that Merck knew Vioxx posed cardiovascular risks many years before the company pulled the drug from the market. Jurors awarded Ernst $253.4 million in damages, The Associated Press reported, reflecting a combination of his lost pay as a Wal-Mart produce manager, mental anguish, loss of companionship and punitive damages. In Texas, punitive damages are capped at twice the amount of economic damages -- lost pay -- and up to $750,000 on top of non-economic damages, which are composed of mental anguish and loss of companionship. Plaintiffs lawyer Mark Lanier predicted the loss would be the first of many for Merck, which faces many other suits on the Vioxx link to heart problems. "I've got several thousand other clients," Lanier said in an interview on CNBC. "What happened with Merck is a crime." Merck didn't agree. "We believe that the plaintiff did not meet the standard set by Texas law to prove Vioxx caused Mr. Ernst's death," Merck lawyers said in a press release. "There is no reliable scientific evidence that shows Vioxx causes cardiac arrhythmias, which an autopsy showed was the cause of Mr. Ernst's death, along with coronary atherosclerosis." Merck added that the case "did not call for punitive damages," saying the company "acted responsibly -- from researching Vioxx prior to approval in clinical trials involving almost 10,000 patients -- to monitoring the medicine while it was on the market -- to voluntarily withdrawing the medicine when it did." "There are other Vioxx cases coming to trial and we will vigorously defend them one by one over the coming years," Merck said. Even so, the jury verdict gave investors the jitters. Although Merck has established a $675 million reserve to finance legal defense costs, it hasn't established a reserve for potential damages. Analysts' estimates on Merck's Vioxx litigation costs range from $4 billion to $55 billion. Merck is a defendant in 120 lawsuits seeking class-action status. The next state court case could start next month in New Jersey, and the first federal trial is expected to start in November in New Orleans. Merck also is a defendant in a number of lawsuits alleging securities law violations in relation to its handling of Vioxx, and it's a defendant in some cases alleging violations of laws governing retirement savings plans. Plaintiffs outside the U.S. have filed Vioxx-related suits, too. Merck says it withdrew the drug only after clinical trials showed that people who took the drug for more than 18 months had a higher risk of heart attack and stroke than did people receiving a placebo. In February, a Food and Drug Administration advisory committee voted 17-15 that Vioxx could be returned to the U.S. market under certain restrictions for some patients. The FDA and Merck are discussing the matter, though the drug giant says it hasn't decided whether to revive Vioxx. In July, a panel of medical advisers to the Canadian government recommended by a 12-1 vote that Vioxx be reinstated with certain restrictions. Merck plans to discuss the matter with Canada's health department. On Friday, Merck fell $2.22 to $28.26.
I am happy about this. The drug companies want us to be sick so their shareholders are happy. They advertise their drugs all over the TV, when it's supposed to be the doctors' jobs to prescribe the appropriate medication (doctors get compensated for prescribing certain drugs, so we're not safe there either). But since all these drugs are all over the TV, you have patients asking doctors for the drugs by name. It's all about the almighty dollar. Makes me sick. I need to get a prescription.
250 million dollars is a joke. They don't even know if vioxx is what caused his death. I mean I know these big companies have to pay, but is this mans life worth 250 million dollar?
Was that a joke? You can't put a price tag on someone's life. And if you did no matter what that price tag was it would be too cheap. I have lost both my parents(not to vioxx,) and I didn't get 250 mil for it, but I can guarantee you if I did and ended up getting twice that as a result, but had a chance to trade it in for their lives you bet I would trade in the money. Sorry if you were somehow joking with that. I'm sure the loved ones would trade in that money for have their family member back.
Some do. I have a very good friend that I have known for 15 years, and he's a doctor. He said it happens....they receive some sort of kickback or compensation in some form for prescribing certain medications. Maybe "compensated" is a bad term to use.
For insurance purposes people do put a price on the value of life. I know life is priceless to the people who are close to somebody.
This will be reversed on appeal. The article says punitative damages are two times economic losses in Texas. The economic losses were only 300,000 in this case. That is 600,000 for punitaves not 229M. If the jury applied the law correctly the award would be about 25M. Am I missing something?
I agree Merck should receive some penalty. But the way that Judges handling such trials would cause Merck bankrupcy. As far as I know, Merck handled the Vioxx situation very well. They voluntarily withdrew it after a clinical trial showed evidence of increased cardio risk. All drugs has certain side effects. Some are very serious. Cases like Vioxx are almost unavoidable for new drug development. Even Aspirin and Tylenol show serious side efffects unknown for dozens of years. It's true that drug companies need to follow strict regulatory and ethical rules, but if they do, there should be some protection for them against cases like Vioxx.
I guess the final award would be 1~2 mil. Merck's overall litigation would be ~20 billion (4 ~ 55 billion). A significant portion of that amount would go to lawyer's pocket. If Merck survives, those cost would be transferred to the average American people, so prepare for even higher prescription drug cost.
This is a good point that should be emphasized, if Aspirin were to come onto the market today, there is no way that it would be approved by the FDA (risk of bleeding would be too high), despite all the cardiovascular benefits it may show. This is untrue, no doctor in the US can receive any type of monetary kick back from a pharmaceutical company. A doctor can receive free promotional items, as well as sponsored lunches that provide an educational benefit (i.e. the drug rep can talk about their drug and provide lunch). I think what your friend is talking about is enrolling people in clinical trials. Your friend can enroll people in trials (i.e. comparing drug A to placebo) and get compensated for each person he/she enrolls. So in essence a doctor can get paid for prescribing certain medications during clinical trials.
we r a cold cash culture companies now calculate losses like this into their cost i mean if they kill 1000 people maybe half will know it was then and only half of them will sue and only half of those will win and thanks to malpractice/tort/liability reform there is a limit the final price as acceptable that is the company logic but to me a 1000 people dead is not acceptable rocket river
My wife is a drug rep at Merck. Merck is one of the most reputible drug companies out there (hence the reason why they volunterily withdrew Vioxx...as opposed its direct competitors which still have their products on the market). Merck is pretty strict as to NEVER give the appearance of bribing DRs. Many drug companies have questionable practices about marketing to DRs but Merck is strictly by the book. So many people want to generalize "all drug companies" are bad and who say this case is a good outcome probably have a very small understanding of the pharma industry as a whole. This industry is quite possibly one of the most misunderstood industries and therefore it's become fashionable to bash drug companies. Yes, they're not perfect but I wouldn't say they are the evil empire. I'd put more blame on the big insurance companies than the big drug companies.
That happens when patients take new drugs and hope for better efficacy. Some side effects are well-studied and others can only be learned from long time practice. Patients have the choice for old drugs whose toxicity is well-documented, but if those dont work, they have to try new prescription drugs. It's a ethical dilemma especially for very sick patients, e.g., cancer patients. They have no choice but to become the guineapig of new drugs and contribute to the development of better drugs to help more people.
Stricter standards need to be implemented (it doesn't help that the FDA is so willing to look the other way - why aren't they accountable too?). And all drugs necessary to a person's health and well-being should be sold at just enough money to cover cost. No corporate entity should ever be given the power to sell us our own health at a monstrous profit. Merck, and all pharmaceutical companies, should either be nationalized, or forced to sell their drugs at a small percentage of cost. I don't care if people make a billion dollars selling Fluffy Monkey® sock puppets at a thousand bucks a pop, but no item absolutely necessary for a person's physical health should ever be unaffordable. Here's Merck's last crime: Here's one that was paid out of court, from the Federal Trade Commission website: If you want to find more examples of Merck's history, they're not hard to find. Unfortunately, Merck usually settles out-of-court to lessen their convictions in corporate crimes. I truly don't know how people maintain the illusion that corporate entities like Merck are benevolent. They're not. They, like most companies, are out to make the most profit possible, without regard for lives lost or laws broken if those transgressions won't significantly impact their stock value. Seriously, let's just cut the bull**** already. (p.s. - is the D&D nearby somewhere? )
Come on, companies need to make profit, and none of them have an absolute clean record. Why not asking Citibank to share their 18 billion profit last year, or Oil companies to sell gas at a price just enough to cover their cost? It seems that we do have many communism supporters here after all. Just like other industry, there are some big drug companies that are struggling. For example, Wyeth has paid 13 billion for the Phen-phen diet drug trials, and is expected another 8 billion. Schering-Plough has been losing money for years. This is a high risk industry prone to various litigations, and a big incident like Vioxx would hamper a giant like Merck for a long time. Without a high profit margin, most big drug companies would go bankcrupcy in ~15 years, and the American people wouldn't have so many new drugs available each year. Some drugs have bad problems, but most of them do improve our health greatly, e.g., Lipitor, Viagara.
