A Texas jury ruled that drug giant Merck has to pay a staggering $253 million to a widow whose late husband used its one-time blockbuster painkiller, Vioxx.
And while many say that award may be cut in half on appeal, it’s only the first in what promises to be a wave of damaging and costly suits against the company. “It certainly will encourage more people to sue,” Les Funtleyder, a health strategist at Miller Tabak & Co., told Bloomberg. “This is going to be a decade-long process.”
Investors reacted by pummeling the New Jersey company’s stock, sending shares down $2.35 – almost 8 percent – to $28.06 in New York Stock Exchange action.
The suit, brought by Carol Ernst in Angleton, Texas, over the death of her 59-year-old husband Robert, was seen by many as a signal of what lay ahead for Merck as it continues to fight more than 4,200 other Vioxx-related suits around the country.
The seven-man, five-woman jury came back after two days with the $253.4 million verdict – $24.4 million in actual damages and $229 million in punitive damages.
As the jury read the verdict the widow began to cry. Her attorneys jumped up and shouted, “Amen!”
“Anyone who said they are too small-town or won’t understand, they are crazy,” said Ernst’s lawyer, Mark Lanier. “They know truth and they know justice.”
But the company was quick to lay out its grounds for appeal – and legal experts yesterday backed its claim that the Texas Appellate Court would slash the punitive award.
“We believe that we have strong points to raise on appeal and are hopeful that the appeals process will correct the verdict,” said Merck senior V.P. Kenneth C. Frazier in a statement. “Our appeal is about fundamental rights to a fair trial.”
Even Ernst’s lawyer Lanier was forced to admit after the trial that the punitive damages would likely be reduced on appeal. He had sought $40.4 million on behalf of his client.
Professor of law Anthony Sabino, from St. John’s University in New York, said the Supreme Court had recently given guidance on punitive damages
“What the jury did in Texas is way, way beyond that,” he said. “Overall, I’m going to say maybe $75 million. But that’s real money for anybody.
Jurors in Angleton rejected Merck’s defense that Robert Ernst died of clogged arteries rather than a Vioxx-induced heart attack that led to his fatal arrhythmia. The damages award included his lost pay as a Wal-Mart produce manager, mental anguish, loss of companionship and punitive damages.
Sabino said it was important to remember that Texas juries tended to be more liberal in awarding compensatory damages and that many of Merck’s future Vioxx-related suits would play out in New Jersey.
“You are fighting Merck on their own territory, you have to give Merck a homeground advantage,” he said. “I don’t think anyone should draw the wrong conclusion. This time the plaintiff won. It doesn’t mean plaintiff will win in the future.”
Vioxx, once worth $2.5 billion to Merck, was pulled off the market in September 2004 after a study showed it doubled the risk of heart attack or stroke if used for more than 18 months. with Post wires
Bitter pill
A Texas jury awarded more than $253 million to the family of Robert Ernst, who died after taking Merck’s Vioxx painkiller.
On pill bottle: Ernst, et. al. v. Merck & Co., Inc.
Verdict: Actual damages: $24.4M
Punitive damages: $229M