A Texas jury's $253 million verdict against drugmaker Merck had lawyers worldwide plotting strategy in a war over billions of dollars that will last years.
Merck's painkiller Vioxx was taken off the market nearly a year ago after it was linked to an increased risk of heart attacks and strokes. About 4,200 lawsuits were expected. But Mark Lanier, the victorious lawyer for Carol Ernst, widow of Robert Ernst, a triathlete who died in 2001 at 59, said Sunday that he has fielded calls from lawyers in Germany, Israel, Ireland and Venezuela and predicts the number could grow to 30,000.
London newspapers reported hundreds more lawsuits are expected in the United Kingdom after Friday's decision, which caused Merck stock to fall 7.7 percent, erasing $5.2 billion in market value.
Merck said again Sunday that it intends to appeal in Texas. It had previously set aside $675 million to fight Vioxx lawsuits, and spokesman Kent Jarrell said that the amount stands, even though estimates of Merck's liability range from $4 billion to $55 billion. Companies and their shareholders find comfort in predictability, but quantifying Merck's losses is an exercise in futility, writes Prudential analyst Tim Anderson. Drugs, once a sure-footed investment, are behaving like the tobacco stocks of old, with wild swings riding on each jury decision and appellate court reversal.
It's too early to know if the $253 million decision is "an aberration or a harbinger," says lawyer Arvin Maskin, who is hired to defend companies in high-stakes product liability cases. Texas law limits liability, and even Lanier expects the $253 million verdict to be reduced 90 percent. But Lanier says he has several options for his next case and is looking for a venue in another state where he can hand Merck "a schoolboy spanking."
Victor Schwartz, who chairs the American Bar Association's Product Liability Committee, says chest pounding is premature. Merck will learn from its losing strategy like a football team changing its ineffective defense from one Sunday to the next, he says.
In its statement, Merck said its legal strategy will remain "based in sound science," but Schwartz said Merck will adjust to the fact that jury decisions ride on emotion. Much of Merck's defense in the Texas case relied on a coroner's report that said Robert Ernst died of arrhythmia, not a heart attack. That report was in dispute by trial's end.
New York plaintiff lawyer Christopher Seeger, who says he will try the next case against Merck starting Sept. 12 in New Jersey, says Merck is only claiming to use a defense based on strict science. It tried to establish CEO Raymond Gilmartin as a Boy Scout leader and the company as a champion of the fight against AIDS in Africa. Seeger says sympathy will be a difficult card for Merck to play against his client, a Vietnam veteran who suffered a heart attack. Seeger says he does not expect high damages because his client did not die.
Maskin says if Merck wants to win, it needs to convince juries that it was candid and acted responsibly as soon as it knew the drug was a danger, It will take about six months of trials before making a decision on major changes to its strategy, he said.
Allstate CEO Edward Liddy declined comment Friday, but told USA Today five months ago that if the U.S. wants its pharmaceutical industry to remain a global leader, the FDA's seal of approval should provide some legal cover.
The FDA itself was negligent in the Vioxx case when it dismissed the concerns of its own scientists, said Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee that has held hearings on the FDA's oversight. "A too-cozy relationship with a drugmaker put lives at risk," Grassley said.
Contributing: Kevin McCoy