Merck loses Vioxx case, told to pay $51 million
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A federal jury on Thursday found that Merck & Co. Inc. was negligent and knowingly made misrepresentations about its withdrawn pain medicine Vioxx, and awarded $51 million to the plaintiff.
The New Orleans jury, in the second federal trial involving a Vioxx product-liability lawsuit, found that Merck had knowingly misrepresented or failed to disclose a material fact to the plaintiff’s physicians and that doctors in the case and the plaintiff himself were not at fault.
The plaintiff, Gerald Barnett, a 62-year-old retired FBI agent who had a heart attack in 2002 after taking Vioxx for 31 months, was awarded $50 million in compensatory damages and $1 million in punitive damages.
Barnett, who used Vioxx for pain caused by a car accident, is a resident of South Carolina, where the suit was originally filed and which bases punitive damages on the conduct and business of the defendant solely in that state, rather than in the entire country.
Merck, which has now has lost four cases and won five in its defense of Vioxx, vowed to appeal Thursday’s verdict. The company is facing at least 14,200 other lawsuits from people who claim to have been harmed by the drug.
“Both the finding and the amount of damages were totally uncalled for in this case because Merck acted appropriately in providing information to the medical, scientific and regulatory communities in a responsible and appropriate manner,” Merck said in a statement.
The pain and arthritis drug had annual sales of $2.5 billion before it was recalled in 2004 after a clinical trial showed it doubled the risk of heart attack among people taking it for more than 18 months.
“This verdict will remind people that Merck still faces significant potential financial liability for Vioxx, which could wind up being at least $5 billion in the long run,” said Shaojing Tong, an analyst with Mehta Partners.
Even so, Tong said he was not overly concerned with the jury award because Merck, through its appeal, will likely reduce the size of the judgment.
He noted that Merck has still won a majority of the jury verdicts, and will therefore likely stick to its strategy of fighting each case one by one, rather than attempting to conclude a costly national settlement with plaintiffs.
Money manager David Dreman, whose Merck shares form a major holding of his $17 billion portfolio, said the verdict was not all that surprising because New Orleans juries have a history of favoring plaintiffs over companies.
“This one is coming from a district that has always been anti-corporate,” said Dreman, who predicted the judgment will “probably get knocked down on appeal.”
Merck shares were down 1.8 percent, or 73 cents, to $40.45 in afternoon activity on the New York Stock Exchange, after touching as low as $40.30.
The stock plunged when Vioxx was recalled two years ago, but has reclaimed almost all lost ground due to earlier favorable Vioxx verdicts and enthusiasm for the company’s new Gardasil cervical cancer vaccine and its experimental Januvia diabetes treatment.
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