Month: July 2005

First Vioxx lawsuit in Texas has huge implications for Merck

There is a lot at stake for Merck in the Vioxx lawsuits.

The first Vioxx trial is set to start in Texas. Analyst says Merck’s liability could hit $25 billion.

One Wall Street analyst, Chris Shibutani at J.P. Morgan Securities, estimated that Merck’s liabilities from Vioxx range from $8 billion to $25 billion, far higher than the $4 billion to $18 billion estimated by Merrill Lynch analyst David Risinger in November. Shibutani rates the company “neutral.”

“The first case has a lot of impact on what comes afterward,” Chip Babcock, a partner at Houston law firm Jackson Walker LLP, told Reuters. Babcock said the lawsuit could influence impending litigation in state courts in New Jersey, California and Texas, as well as the U.S. federal court in New Orleans, the news agency reported.

Merck pulled Vioxx, a $2.5 billion arthritis painkiller, off the market on Sept. 30, 2004, in response to concerns the medication could cause heart attacks and stroke. The company, however, has never conceded there were risks. Since the recall, more than 2,300 lawsuits have been filed against the Whitehouse Station, N.J.-based company by more than 4,600 plaintiffs. Jury selection got underway Monday in the first civil trial at Texas Superior Court before Judge Ben Hardin.

Carol Ernst has sued Merck in the Angleton, Texas court and blames the company for the 2001 death of her husband, a Vioxx patient. Her lawyer, W. Mark Lanier of Houston, said that Vioxx caused the fatal cardiac arrhythmia of Robert Ernst and that Merck suppressed information about the dangers of the drug.

“I believe they took the three monkey approach,” said Lanier on Friday. “They covered their eyes because they didn’t want to see anything that would hurt the sale of Vioxx, they covered their ears because they didn’t want to hear anything that would hurt the sale of Vioxx, and they covered their mouth because they certainly didn’t want to say anything that would hurt the sale of Vioxx.”

Merck has consistently denied charges that Vioxx caused deaths, on the grounds that these charges have never been proven. Merck has also denied allegations that it concealed information, noting that the company voluntarily withdrew Vioxx from the market.

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