August 19, 2005
The Vioxx Verdict
Sounds like a Ludlum book...
I went to write a knee-jerk, pro-Merck, "are you joking?" post about the award of more than a quarter billion dollars to the widow of a 59-year old Wal*Mart manager.
I own the high horse of "chasing capital out of the pharmaceutical sector," and my Multiple Sclerosis gives me what Maureen Dowd would call "absolute moral authority."
But I counted to ten and watched Larry Kudlow's show, and I am having second thoughts. The widow's attorneys were on and made a compelling case to Larry, who is at least as tough on tort reform and crazy awards as I am. One said that the juries were conservative, many Republican; most favored tort reform and the forewoman said during jury selection that she thought Merck was a great company.
The guy watches Kudlow & Co., and said "Larry, that's how strong the evidence was -- you'd've voted for this settlement."
Kudlow was surprised and so was I. Color me suspicious still, but perhaps there is real evidence of malfeasance, in which case I will not blindly back the corporation.
Hinderacker at Power Line notes that the settlement will get a serious haircut in the appellate process, which is good. The amount was outrageous.
The problem is that this was the first of several thousand Vioxx cases to go to trial. It isn't feasible to try them all, so the first few verdicts will tend to set the ground rules for future settlements. Even though the plaintiff will never collect the bulk of this particular verdict, it likely will cost Merck more than $250 million in the years to come. The company's stock lost more than $5 billion in value today.
No word on whether John Hinderacker saw Kudlow & Co. today.
UPDATE: I have had a change of heart.