Pharma industry faces consequences of Vioxx case

Merck & Co. has been ordered to pay the widow of Robert Ernst $253.4 million in damages. Although these costs are expected to be reduced to 10% of that amount because of a state cap on punitive damages, the case sets a dangerous precedent for Merck, which is already facing 4,000 similar lawsuits.

The verdict against Merck could also have far reaching repercussions for other drugmakers currently facing legal challenges based on the use of their products. Out of court settlements could now be encouraged and Pfizer is likely to be particularly wary of the ruling. Pfizer’s Celebrex, which belongs to the same class of drugs as Vioxx, remains on the market.

Although Merck’s lawyers say they will appeal the verdict, further would-be plaintiffs are preparing to bring actions against the company. British lawyers, for example, are contemplating bringing a case for a group of around 150 potential claimants, many of which are relatives of patients who died while taking the drug.

Analysts now suggest that negligence claims against Merck could total between $10 billion and $50 billion. The company withdrew Vioxx, which accounted for 11% of last year’s sales of $23 billion, in September 2004.

While Merck insists that it acted responsibly during every stage of the drug’s development, observers suggest the legal cases against it could generate further evidence of the company’s prior knowledge of the health risks associated with the drug.