Merck's Vioxx litigation strategy is paying off
Merck hasn't settled any of the eight lawsuits brought against them in the wake of the Vioxx controversy. They've done the math, and it's cheaper to fight all of the suits than it is to settle out-of-court for one lump sum. So far, Merck's winning: 5 cases to 3, the most recent victory being in a Los Angeles courtroom.
PharmaGossip points out that Merck's stock is now back within 10% of its pre-Vioxx withdrawal price.
There's still some 14,100 cases to be tried, but Merck is banking (quite literally) on the fact that juries will find in their favor when they really delve into the science that's involved. I tend to agree with them — I've long thought that the benefits of Vioxx (and Bextra, for that matter) outweighed the potential consequences of using the medication, and I've spoken to patients who share my sentiments. The law blog at the WSJ has some commentary on the pattern of verdicts:
In the three cases that Merck has lost, juries have awarded punitive damages to the plaintiffs, finding that Merck, for example, acted with wanton and willful disregard. In interviews, jurors have said they believed Merck knew of Vioxx’s risks, and failed to warn the public.
When Merck has prevailed, it’s largely had a clean sweep of all the allegations—with juries finding it acted appropriately and that Vioxx didn’t cause the plaintiffs’ injuries.
Plaintiffs' attorney Christopher Seeger of New York-based Seeger Weiss, a lead lawyer in the Vioxx litigation, says it all comes down to the credibility of each plaintiff and how much sympathy he or she generates. "Juries tend to look at the plaintiff and say, do I want to award this person money? They very rarely split the ballot up." Seeger says that the Vioxx trials with living plaintiffs who appear relatively uninjured have been and will continue to be the toughest to win.
Unfortunately, in cases involving medicine and science, a jury of one's peers is probably not the best determiner of who is ultimately in the right: popular opinion does not determine the actual facts of anything — argumentum ad populum isn't a measure of anything except popularity. (Despite what intelligent design types would have you believe.)
These first hand-picked cases are testing grounds for the rest of the suits against Merck. Counsel on both sides are trying to get a feel for what juries will stand for and what kinds of cases will win. There's a trial going on now in New Orleans picked by the plaintiffs' bar that will be a real determiner of how well Merck is going to do.
Unfortunately of the remaining ~14,000 cases there's no breakdown on the demographics of the plaintiffs. The law blog at the WSJ points out, though, that if even 25% of the verdicts go against Merck, the company will still have a real problem on their hands, particularly if the settlements are in the average $5-10 million range. (Do the math, even at $5 million apiece it's still a ton of money.)
Personally, I hope Merck wins the vast majority of their cases. I like them as a company, and with a rich pipeline (relative to their major competition), I think we'll see some interesting new therapies (Gardasil, platensinycin) come out of their labs, provided they aren't crippled by Vioxx litigation. We're a long way from the end of the Vioxx stories, but we're starting to see some emerging trends. That's a hopeful sign for everyone wanting to get past the whole thing.
[tags]Medicine, pharmacy, Merck, Vioxx[/tags]
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