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Merck recently agreed to settle thousands of heart attack and stroke cases surrounding Vioxx, its highly profitable arthritis medication � allowing both sides to win by agreement, rather than face uncertainties of trial. While the settlement is significant in itself, the road to this resolution will ultimately impact strategies that both plaintiffs and defendants use in future pharmaceutical litigation. The Vioxx story is important. In late May/early June 1999, Merck launched super-aspirin Vioxx, rapidly becoming a $2-billion-a-year arthritis medication. In March 2000, Merck completed an 8,000 patient study, VIGOR, hoping to prove Vioxx reduced serious, if not life-threatening, gastrointestinal side effects of pain medication. Although results showed a decrease, they also revealed a five-fold increase in heart attacks compared to those individuals on another painkiller, Naproxen. Merck waged an unprecedented public relations campaign claiming Vioxx was safe. But it only told one side of the story � that Vioxx was safer on the stomach. Lawsuits were filed in New Jersey state court and elsewhere in 2001, seeking damages for heart attack and stroke victims. Merck kept selling Vioxx until September 2004, when another large patient study, APPROVe, replicated the VIGOR heart findings. As of Sept. 30, 2004, when Vioxx was pulled from the market, 175 lawsuits had been filed in New Jersey state court. Much of the groundwork that later supported five plaintiffs’ verdicts was laid in those early cases. After Merck stopped selling Vioxx, 15,000 more cases were filed in New Jersey state court and more than that number in federal court. Two thousand cases were filed in California state court and more than 1,000 in Texas state court. The massive numbers required coordination. Dozens of law firms, new to the litigation, had to get up to speed. During the ensuing three years, 16 cases were tried, each an enormous effort. Sixteen Vioxx cases were tried to verdict in state and federal courts; Merck won 11 and plaintiffs won five. Within this period, Merck did not settle a single case and appealed each of the five plaintiff verdicts. Its defense was simple � heart attacks occur every 34 seconds in the U.S., and heart disease is the most prevalent illness in America; why blame Vioxx? Almost every middle-aged and older person has known heart attack risk factors. So Merck blamed the plaintiffs, hiring top-shelf scientists and physicians, who forcefully pointed to alternative causes for heart attacks in each case. On the other hand, plaintiffs had massive documentation that Merck hid Vioxx’s increased risk. The plaintiffs’ verdicts were large, and, in each case, juries returned huge damages ranging from $13.5 million to $250 million. Those juries were angry with Merck hiding the truth. Plaintiffs were getting smarter in admitting they had risk factors, blunting Merck’s defense, while doctors began to admit Merck failed to properly tell them the other side of Vioxx’s story. Punitive damages were also awarded in several cases. No end seemed in sight for the litigation. Even if 50 full-time judges tried five cases at a time, it would take more than 13 years to try all the cases. Rather than continue the adversarial battle, the judges involved in the consolidated actions, asked the parties to sit down in good faith to see if settlement terms could be crafted. Negotiations over a complex arrangement continued for months, in secret. Finally, in early November, Merck agreed to pay $4.85 billion to settle the approximately 20,000 heart attack and stroke cases. Like any settlement, this deal was struck because both sides could win and Merck reduced the value of each case. Each side had clear-cut reasons for reaching a settlement. • Resources. To date, Merck has spent more than $1 billion in cash defending Vioxx. Additionally, Merck sustained indirect losses associated with corporate executives, pharmaceutical sales representatives and other employees collectively spending years preparing for and being examined under oath. Time was spent on litigation-related matters instead of focusing on profit-related endeavors. Plaintiffs and their counsel also suffered financially. Filing fees in New Jersey alone are $200 per case, and Merck plaintiffs took nearly 700 depositions of physicians, plaintiffs, family members and other fact witnesses. Constant travel and massive expenses associated with paying for huge amounts of medical records and expert witnesses were incurred. Plaintiffs who prepared cases for trial spent a minimum of $500,000 � a million-dollar outlay was not unreasonable. These financial factors played a role in bringing the parties to the negotiating table. • Federal pre-emption. The defense of conflict pre-emption is raised in all pharmaceutical litigation. A drug manufacturer claims the FDA approval process prohibits state law product liability claims, whether tried in state or federal court. In federal and New Jersey Vioxx coordinated proceedings, both courts found that pre-emption did not apply. However, the state court judge overseeing Texas coordination found pre-emption, and 1,000 Vioxx cases filed in that state were in legal limbo. The issue of pre-emption is in flux, as the U.S. Supreme Court granted certiorari in two cases where pre-emption is the issue. Uncertainty surrounding what the Supreme Court will decide was also a factor in reaching the settlement. • MDL remands. If Merck continued trying every case individually, the judges overseeing the coordinated proceedings were strongly considering disbursing them throughout the various jurisdictions they controlled. The MDL judge considered disbanding the federal consolidation, which would return all the federal cases to district court where they were originally filed. Multiple trials in multiple locations before multiple judges was a concern for both sides. This scenario could provide the potential for inconsistent legal and factual rulings that could impact both plaintiffs and Merck, and further drain the parties’ resources. IMPACT While our job is far from over, the settlement has given us a chance to reflect on the Vioxx litigation, and consider how it will impact future mass tort litigation. • Plaintiffs. Merck’s defense took away the notion that plaintiffs counsel could warehouse minimally injured clients and eventually reap the benefits of a mass settlement. Firms now will hesitate to file cases on behalf of clients with the hope for even a few dollars. Merck declared that it would defend every case vigorously and the company held its ground. Risk factors such as high cholesterol, high blood pressure, smoking, diabetes, etc. were highlighted to show that any one of these, and not Vioxx, was the cause of the injury. Merck’s strong defense did not end with exhaustive medical reviews. Death certificates of deceased relatives were subpoenaed to see if there was a family history of heart disease. In one of our cases, the client was confronted with a record from a minor criminal offense from 25 years earlier while another clients’ department of motor vehicle records was subpoenaed. This scorched-earth strategy led to dismissal of many cases. The settlement maintains this posture. To be eligible for a recovery under the settlement agreement, there must be evidence of a confirmed heart attack or stroke, a set amount of Vioxx pill use, and use of Vioxx in close proximity to the claimed injury. Specific medical records supporting these criteria must be produced to the claims administrator overseeing the settlement program. If the administrator does not believe the eligibility criteria have been met, no money will be awarded. A claimant has an opportunity to opt-out of the settlement program at that time but, by doing so, the claimant’s only recourse is to return to the court system where Merck has already vowed to fight every non-eligible case. Experience has shown that there will be future mass tort litigation involving defective products or toxic chemicals, with plaintiffs likely to receive compensation for injuries related thereto. But plaintiffs and plaintiffs firms should be mindful of the Vioxx defense and closely scrutinize any case before filing. • Corporate defendants. When Vioxx was first withdrawn from the market, some estimated its potential liability exposure anywhere between $25 and $50 billion, and Merck’s stock took a direct hit. But, by defending every case vigorously, Merck showed that only select individuals were truly harmed by its product. Over time, the stock rebounded, actually surpassing its pre-withdrawn levels. The pharmaceutical’s successes will undoubtedly influence litigation strategies of other corporate defendants. • Government regulation. The FDA missteps in its decision-making regarding Vioxx has led to review and overhaul of the way drugs are regulated. Historically, the FDA was given free reign by Congress to act as it saw fit. But congressional inquiries discovered that the FDA was often understaffed, underfunded and powerless to properly oversee the industry it regulated. For example, the VIGOR study that found that Vioxx had five times as many heart attacks as comparator drug Naproxen was not incorporated in the drug’s label until more than two years later in April 2002, and then only obscurely in the precautions section. Recent legislation has strengthened the FDA. When historians and legal scholars look back on the Vioxx litigation, they will likely conclude that it greatly impacted the way our corporate, legal and governmental communities conduct their affairs. Any law firm handling pharmaceutical cases in the future will have to understand and weigh this litigation history before filing suit. Sol Weiss and David Jacoby are shareholders in Anapol Schwartz Weiss Cohan Feldman & Smalley, and serve as co-plaintiffs’ liaison counsel in the Vioxx New Jersey litigation, representing nearly 900 plaintiffs. Gregory Spizer is an associate at the firm and has been actively involved in representing individuals who have claimed injury from Vioxx, handling cases from inception through trial preparation and the settlement process. They can be reached at [email protected], [email protected]and [email protected].

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