The Vioxx Verdict, II

When I calmly think a situation over and refrain from making a rash decision, as I did in my first posting on the $229 Million Texas Vioxx Verdict, I reserve the right to change my mind.

Like Trivial Pursuit, sometimes your first answer is the best. And my first answer is that Merck in no way deserves this company-threatening decision. Two columns in today's Wall Street Journal have put me back on-track.

Both detail facts I did not know when I let the silver tongued lawyer calm me and Larry Kudlow on CNBC's "Kudlow & Company." Although some data exist showing accelerated heart risk, there is actually little chance and no evidence that Vioxx contributed to this death at all. The widow's husband had 70% blockage of his arteries, did not suffer a heart-attack according to the death certificate, and had only taken Vioxx for eight months (elevated risk usually shows up after 18).

First is a Wall Street Journal editorial that questions Merck's viability "if you multiply the number of suits by only the $25 million in economic losses imposed by the Texas jury you have a company that could soon be turning over most or all of its earnings to the trial bar."

The verdict is also more bad news for the millions of Americans who suffer from the kind of chronic pain for which stomach-friendly Cox-2 inhibitors like Vioxx provide welcome relief. Before Vioxx, Celebrex and other Cox-2 inhibitors, patients relied on pain medications like aspirin and ibuprofen, which are harder for some to tolerate. There are 15,000-plus deaths a year from gastrointestinal bleeding in people who develop full-blown stomach ulcers on this older class of drugs.

The cardiovascular risk that led Merck to withdraw Vioxx appears only in patients who have taken the drug for more than 18 months. The husband of the plaintiff only took it for eight. Merck had kept the Food and Drug Administration fully aware of its clinical results showing the relatively small heart-attack risks.

Like all drugs, Vioxx has risks and side-effects but was hardly an "unsafe" drug. Earlier this year, an FDA advisory panel recommended that the drug go back on the market, with appropriate re-labeling. But after Friday, and given the brutal vagaries of the American tort system, the question is less about Vioxx's survival than Merck's.

The second is a guest editorial by Richard Epstein, Ambush in Angleton, which questions the size of the award and the effect on the whole pharmaceutical sector.

Forget the jury's whopping quarter-billion-dollar verdict in Ernst v. Merck, because it's cut 90% by the caps that Texas law places on punitive damages. Still, where do $25 million in actual damages come from? Robert Ernst died in his sleep, without pain and without medical bills. His lost income as a Wal-Mart employee was small. But the $24 million price tag for anguish and loss of companionship to his widow Carol is off the charts.

It seems the doctors were arrogant and the jurors wanted to send a message.

So, in return, I would like to send my message to Mr. Lanier and those indignant jurors. It's not from an irate tort professor, but from a scared citizen who is steamed that those "good people" have imperiled his own health and that of his family and friends. None of you have ever done a single blessed thing to help relieve anybody's pain and suffering. Just do the math to grasp the harm that you've done.
[...]
Ah, you will say, but we're only after Vioxx, and not those good drugs. Sorry, the investment community won't take you at your word. It realizes that any new drug which treats common chronic conditions can generate the same ruinous financial losses as Vioxx, because the flimsy evidence on causation and malice you cobbled together in the Ernst case can be ginned up in any other. Clever lawyers like Mr. Lanier will be able to ambush enough large corporations in small, dusty towns where they will stand the same chance of survival that Custer had at Little Big Horn. Investors can multiply: They won't bet hundreds of millions of dollars in new therapies on the off-chance of being proved wrong. They know they'll go broke if they win 90% of the time.

Mr. Epstein contends that "Much as I disapprove of how the FDA does business, we must enact this hard-edged no-nonsense legal rule: no drug that makes it through the FDA gauntlet can be attacked for bad warnings or deficient design."

It’s hard to pick a villain between the tort bar and the FDA. I would not choose to further empower the Government as an absolute arbiter of safety and efficacy, because I wish to reduce the FDA’s role. But we have to do something. I need new drugs today, we will all need them, someday.

Pharmaceuticals Posted by jk at August 22, 2005 4:31 PM