AP/South Florida Sun-Sentinel Examines Potential Impact of Vioxx Lawsuits for Merck

The AP/South Florida Sun-Sentinel on Sunday examined the potential financial implications for Merck of "hundreds of lawsuits" filed over side effects from its COX-2 inhibitor Vioxx, which the company withdrew from the market in September. Merrill Lynch estimates that Merck, which is "already wounded" by the withdrawal of Vioxx, could face liability costs as high as $17.6 billion over the next ten years, according to the AP/Sun-Sentinel. The analysis is based on the potential for nearly 51,000 successful liability lawsuits that would each result in awards of $100,000 to $300,000 for patients, in addition to $1 billion to $2 billion in costs related to nuisance lawsuits. Merck has $650 million in available liability insurance. Plaintiffs' lawyers say there have been at least 700 Vioxx-related lawsuits, but Merck says patients so far have filed only 300 lawsuits.

Plaintiffs' Arguments
The first Vioxx-related case to go trial -- which could be as early as December -- "will be closely watched by other plaintiffs and their lawyers, who are hoping for a precedent that could set a pattern for future lawsuits," the AP/Sun-Sentinel reports. Plaintiffs' lawyers will have to prove that the company understood Vioxx's risk and sought to downplay the drug's dangers. They also must prove that Vioxx played a role in causing heart attacks or strokes in patients. The AP/Sun-Sentinel reports that an analysis published in Thursday's issue of the Lancet concluded that Vioxx "should have been withdrawn several years earlier." Merck issued a statement Thursday that said the analysis did not include two studies more favorable to Vioxx. The Wall Street Journal last week reported that sealed court documents indicate Merck officials knew of Vioxx's cardiovascular risks as early as 1997. Merck said the documents were taken out of context. In addition to the costs of the lawsuit, Merck's "reputation will also suffer" if the plaintiffs prove their allegations, the AP/Sentinel reports. Friedman, Billings, Ramsey analyst David Moskowitz said. Standard & Poor's could downgrade Merck's rating this week (Agovino, AP/South Florida Sun-Sentinel, 11/7).

Rival Ads 'Flooding' Airwaves
Drug companies "rushing to fill the vacuum" left by Vioxx's withdrawal are "flooding the airwaves" with commercials that directly address "Vioxx fears in an attempt to grab a larger slice of the market," the Boston Globe reports. Makers of over-the-counter pain relievers such as Advil, Aleve and Tylenol have launched ads promoting the safety of their drugs. A new ad slogan for Tylenol Arthritis Pain Extended Relief states: "Don't let the recent news about your arthritis medicine stop you from treating your arthritis pain." Pfizer, which sells the COX-2 inhibitors Celebrex and Bextra, recently launched a "big ad campaign" that avoids any specific reference to Vioxx "while combating fears among patients and doctors that its drugs may cause similar problems to Vioxx," the Globe reports. Pfizer officials say the ad campaign was planned months before Vioxx's withdrawal. Vinren Mehta, managing member of Mehta Partners, noted that Celebrex is "picking up some of the slack" left by Vioxx, "but the whole COX-2 market can be expected to continue to shrink." He added, "The concerns about side effects are real and intense" (Rowland, Boston Globe, 11/7).

Editorials
Two newspapers recently published editorials about reports that Merck officials were aware of the safety risks of Vioxx years before the recall and the FDA approval process. Summaries appear below.

• Baltimore Sun: Reports that Merck "may not have responded soon enough" to the potential safety risks of Vioxx raise "serious ethical and legal questions," according to a Sun editorial. Merck officials have said that the company acted "responsibly and appropriately as it developed and marketed Vioxx," and that might "turn out to be the case," the editorial states. However, "if it hopes to reassure a jittery public, Merck must present the whole truth -- as soon as possible," the editorial concludes (Baltimore Sun, 11/5).
  
  
• Boston Globe: The pharmaceutical industry for years has called on FDA to "accelerate, not slow down, drug approvals," but the "Vioxx fiasco ... should show the folly of putting speed before patient safety," a Globe editorial states (Boston Globe, 11/8).