Details on the Vioxx verdict.

Now that the punitive damages phase is over for the recent Vioxx trial, with the jury determining that Merck must pay $9 million in punitives to plaintiff John McDarby, the analysis of the jury's actions and comments begins. It paints an interesting picture.

This Boston Globe piece discusses a theory that Judge Higbee, while at first reluctant, decided to allow discussion and consideration of punitive damages, but ultimately did so to increase pressure on Merck to commence a strategy of settlement rather then risk punitives in the other 4600 cases consolidated in her court room awaiting trial.  

The WSJ online has a further analysis which points out just how hard it is to obtain punitive damages against a pharmaceutical company in NJ. Tort reform legislation put in place back in 1994 requires that the defendant company must "display a willful and wanton disregard for the safety of the public" in the manufacturer or marketing of a product. The jury considering the facts and testimony felt they did in fact reach that standard through the selective release of information to the FDA, withholding damaging information in the hope that they could keep the sales machine that was pushing Vioxx moving at full speed.

Furthermore, in a poorly reported twist, the awarding of punitive then requires a referral to state and local prosecutors for review and possible criminal prosecution. While any such prosecution is unlikely, it does drive home the point that the law in NJ requires serious standards be reached to award punitives, and this jury quickly decided that level was reached. The implication for Merck is pretty clear, as you have thousands of other cases in the state which might reach the same standard, thus raising their risk to continue trials.

Merck of course is appealing both the punitive and compensatory awards, so Mr. McDarby isn't home free yet, but it's hard to imagine an appeal court over turning the compensatory award. The punitive award is less certain to be upheld.

The jury comments seem to indicate that the main reason McDarby was compensated was exactly because he was so old, so infirm and had some many risk factors, that the use of Vioxx would never have been recommended by any medical professional who knew of the potential risk of long term usage. In the Cona case it appears that the "prescription gap" was the factor that most swayed the jury to not award damages. The comments indicate they felt he was equally damaged and would have been compensated, but there was a substantial gap in his medical history during which no prescriptions for Vioxx were found. The plaintiffs tried to explain this as the period during which Mr. Cona was using free samples that had been liberally provided by his physician, which may have certainly been the case, but the jury was unwilling to make an award with out hard evidence.

So, in summary, we now have a solid case of long term exposure, documented use, other risk factors that would preclude a responsible person from using Vioxx if the risk was known, and the jury stepped up and hit Merck hard. The fact that a substantial portion of Vioxx users were older, risk prone, long time users raises the stakes once again for Merck in their defense, but also to some degree assists the company in that they were able through the Cona verdict to raise the evidentiary bar for claims and cases to make sure it's only plaintiffs with strongly documented cases.

No clear winner, no clear user, as the stock price has hardly moved beyond where it was pre-verdict, but the outline of the cases that need to be brought and those that have a chance at winning has been narrowed somewhat.  


Posted on April 12, 2006 .