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June 28, 2006

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» Watch the sleight of hand from PointOfLaw Forum
The New England Journal of Medicine published an analysis to the APPROVe data that concludes "one could not conclude from the data that a shorter course of rofecoxib is safe." Merck disagrees. I take no position at this time, because... [Read More]

» Watch the sleight of hand from PointOfLaw Forum
The New England Journal of Medicine published an analysis to the APPROVe data that concludes "one could not conclude from the data that a shorter course of rofecoxib is safe." Merck disagrees. I take no position at this time, because... [Read More]

Comments

Tom

Hi Evan. I'm glad to see another Vioxx related topic. I haven't seen one on your site for quite some time. Here's my 2 cents.

It appears to me that Merck's strategy of trying every case could be backfiring. As more and more of these cases make it to the courthouse, more information about these studies is being released. Unlike Evan, I believe that some law firms are in a mad scramble to contact some of the people they originally turned down because of short term usage. This will obviously drive the number of cases up and increase Merck's liability. At some point Merck will have to discuss settlement options. If they wait long enough they will expand their possible claimants from those who took the pill for 18 months and suffered a heart attack or stroke to anyone that took the drug at all.

Jeff

And with a little luck, Merck will be bankrupted and we won't get groundbreaking medicines from them any more like the new cervical cancer vaccine. Great news indeed!

Evan

Jeff: Say what you want about the Vioxx litigation, but Merck's in no danger of bankruptcy. That's my opinion, anyway, which I once expanded upon here.

If you disagree--if you think Merck is in danger of bankruptcy--please say why.

markk

As of today 6/29 Merck has a market cap of 78.33 Billion.

Some say Vioxx will cost the company $10 billion. Merck has 6 Billion + in cash reserves. The new cervical cancer drug is expected to be a multi billion blockbuster.

Here's an idea: Don't manipulate data, don't commit a fraud on the court, and make safe drugs with clear and to the point warnings, and you can end/limit claims.

Or you can be like Sanofi Aventis and Ketek:

FDA is investigating scientific fraud in a large safety study of Ketek. Criminal investigators from the agency discovered "serious data integrity problems," including a fictitious patient, tests performed too late to be of use, and "suspiciously similar" results for multiple patients, according to a 2004 FDA memo reviewed by The Times.

The study relied on doctors from around the country to report results on 25,000 patients. But one doctor has pleaded guilty to mail fraud in connection with the FDA investigation.

Jeff

How great would the losses need to be to bankrupt Merck? $30 billion? $50 billion? $70 billion?

Any reasonable person would have to conclude the NEJM article will increase Merck's liability. It will increase the probability of loss in each case, and also result in a dramatic increase in the number of cases.

As a worst case, multiply the Lanier/Texas verdict by the number of cases. If plaintiff's lawyers convince many of these juries to "send Merck a message" with an outrageous verdict, Merck would certainly be bankrupted.

One thing is certain. The monies that are spent on these claims won't be funding new breakthroughs like the cervical cancer vaccine. And a once great American success story that created lots of good jobs and advanced our treatment of many diseases will be hobbled. And that is sad.

mythago

Yes, Jeff, it is sad when a company's wrongdoing hurts not only the immediate victims, but future victims who would have benefitted if all that money and effort had gone to doing the right thing in the first place.

If a neighborhood punk smashed the window of your car, I don't think you'd appreciate being told "You can't ask him to pay to replace it--then he won't have any money to buy schoolbooks." Why is it okay to ask victims to suck it up because the wrongdoer might accomplish good deeds with its money?

David Nieporent

Here's an idea: Don't manipulate data, don't commit a fraud on the court, and make safe drugs with clear and to the point warnings, and you can end/limit claims.

Sure you can. In fairytaleland, where (a) there are drugs that have no side effects, (b) people read warnings, and (c) attorneys don't automatically claim ex post facto that some additional warning would have prevented an injury.

mark

Jeff wrote: "Any reasonable person would have to conclude the NEJM article will *increase* Merck's liability."

Uh .... no Jeff. MERCK is the party that increases its own potential liability. Remember: Earlier this year, on May 30, Merck notified the NEJM. Does ABC's reporting of a crime make it a criminal defendant?

By the way David, in my area of the country, I have looked at claims of many who took Vioxx and claimed an injury. To date, probably less than 3% of those who inquired ever made it past the first call. In fairytaleland trial attorneys have billions of dollars to spend on meritless cases.

In the real world guys like Chris Seeger (who lost the first case in NJ) spend about $1 to $2M to try a case.

In fairytaleland, there is no Baycol effect, just the boogeyman dressed up like a trial lawyer, I suppose.

Ted

Chris Seeger's million-dollar investment gets him a percentage of every Vioxx judgment and settlement in New Jersey, even if he never steps foot in front of a jury again, and includes work done that he'll recycle in future trials. And that's before his entirely bogus multi-billion-dollar consumer fraud class action, where New Jersey courts have already indicated that they're not inclined to enforce the Due Process clause of the constitution on Merck's behalf. I don't feel too sorry for him—especially since the plaintiff he brought to trial had no legitimate claim whatsoever, and Merck shareholders won't be reimbursed the millions of dollars the Humeston case cost them to defend.

Jeff

Mythago-Are you truly equating a neighborhood punk with a company that has developed numerous ground breaking medicines? For me, your analogy would work better if the neighborhood punk was instead a basically good kid who accidentally smashed the window and then was sued for well beyond replacement value to "send a message."

Mark-I am simply stating a fact. The NEJM article will increase the ultimate amount Merck pays out in a claim. Or do you believe this article will be ignored by plaintiff's attorneys?

Evan

Ted: Please elaborate on your statement that "Chris Seeger's million-dollar investment gets him a percentage of every Vioxx judgment and settlement in New Jersey, even if he never steps foot in front of a jury again."

You might be talking about a steering-committee arrangement, in which other lawyers have to pay to use common work product, but that wouldn't be tied to how much Seeger spent trying a case--or even whether he tried a case. But perhaps I'm on wrong track. Rather than have readers guess at the details that are omitted from your statement, please fill them in. I'm interested to know even if they don't change your main point that Seeger will be able to re-use a lot of his work product on his next case. I certainly agree with that.

TheSettlementChannel

Evan,

Don't know if you saw the mention of your blog post on the 18th month Vioxx issue in Pointolaw.com, but they have attempted to take your comments, and mine over at the Settlement Channel and do a wonderful spin job. The corporate apologists for Merck amaze me, and they like to imply we are jumping the gun, making more of it then it is, when we all know this is going to be incredibly damaging to Merck's attempts to both shape litigation strategy and public opinion. As I said in my recent blog post, it's nice to know your being read in high places.

http://thesettlementchannel.squarespace.com/

Ted

Yes, I'm talking about the steering committee (and New Jersey liaison) arrangement, but, then again, so are the press reports about how many millions Seeger spent preparing the first case for trial. (And if Seeger didn't hold those roles, Humeston wouldn't have had the priority it did in the queue, but.)

As for TSC's comments, I thought my post was remarkably spin-free. If I were merely a "corporate apologist" for Merck, I wouldn't have noted the reason I initially find Drazen's statement plausible. And I'd still love to be edified about why Merck's use of linear time is so erroneous as to not even be worth addressing when calling the resulting conclusion a "myth": it's an issue I'm completely open-minded about at this point in time.

mythago

Jeff, you are justifying leniency by saying that holding the wrongdoer accountable will harm uninvolved third parties. That logic holds out just as well for any kind of wrongdoing, intentional or otherwise.

In the case of the Vioxx lawsuits, you argue that if we make Merck pay out a lot of money, it will be unable to come up with wonder drugs in the future because it had to give that money to plaintiffs. That argument is true regardless of whether Merck's actions were understandable errors by a good company, or deliberate and malicious actions by greedy executives. Merck's subjective state of mind has no bearing on your cost-benefit analysis.

Going back to the analogy, it doesn't matter a whit whether the kid smashed your window on purpose or by accident. If he needs $100 to buy schoolbooks, and you take that $100 to fix your windshield, it is irrelevant if he was a good kid or a sociopath; he now doesn't have money to buy schoolbooks. Conversely, if you have to pay to fix your own windshield, it really doesn't matter whether you are doing a favor for a nice kid or being victimized by a malicious brat; somebody else broke your windshield and you, not they, have to clean up and pay for it.

Jeff

Mythago-I partially agree. Paying $100 for a $100 windshield would be fair. But demanding the kid pay $1000 because his family is well-off and he needs to be "sent a message" is another matter.

No one would make that demand if it was truely believed the smashed windshield was an accident. Or if a basically good kid made a mistake. But victims of a repeat offender with no redeeming qualities might feel differently.

You and I obviously disagree which better describes Merck.

mythago

But demanding the kid pay $1000 because his family is well-off and he needs to be "sent a message" is another matter.

In what jurisdiction is a plaintiff permitted to avoid proving damages, or to argue that the defendant's wealth permits higher damages?

Ted

In what jurisdiction is a plaintiff permitted to avoid proving damages, or to argue that the defendant's wealth permits higher damages?

Well, we've seen such arguments in both Texas and New Jersey in the Vioxx cases. Lanier asked for $19 billion in the McDarby case.

mythago

Asking for high damages is not improper, as you know, Ted. What part of Lanier's argument was improper?

Ted

What part of Lanier's argument was improper?

You had asked where an attorney was allowed to argue that wealth permits higher damages, and I answered that question. Whether it's "proper" depends on your definition of "proper": in some jurisdictions, it's certainly permitted. That doesn't make it good public policy.

David Nieporent

In what jurisdiction is a plaintiff permitted to avoid proving damages, or to argue that the defendant's wealth permits higher damages?

Are you claiming that the damages to Robert Ernst were actually $253 million? Might that have had something to do with the defendant's wealth? Are you claiming that even the non-punitive portion of that claim bears any relation to actual damages suffered by Robert Ernst?

>Asking for high damages is not improper, as you know, Ted. What part of Lanier's argument was improper?

Just to be clear, when you say "not improper" here, you mean "not forbidden by the rules." But that's a symptom of the problem, not a defense of the situation. To paraphrase Michael Kinsley, the scandal isn't what goes on that's illegal; the scandal is what's legal.

Matt

"Are you claiming that even the non-punitive portion of that claim bears any relation to actual damages suffered by Robert Ernst?"

What number do you believe, based on reviewing the evidence and assessing the credibility of the witnesses, would have constituted an appropriate relation to the actual damages suffered by the Plaintiffs?

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