November 3, 2005 5:13 p.m. EST

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RECENT NEWS   • Merck's Lawyer Goes on Offensive During Closing17 11/01/05   • Vioxx Judge Lets Merck Refer to Memo18 10/26/05   • Merck Loss Jolts Drug Giant, Industry19 08/22/05

Merck Scores Major Victory
In the Second Vioxx Trial

ATLANTIC CITY, N.J. -- Merck & Co. emerged unscathed from the second high-stakes trial over its Vioxx painkiller, marking a critical comeback from a big loss in the first trial and giving the drug giant momentum as it faces a wave of lawsuits related to its former blockbuster.

A jury concluded that Merck fairly represented the safety risks of its Vioxx painkiller, and that Merck didn't commit consumer fraud, meaning that it fairly marketed the drug to doctors and patients.

MORE ON VIOXX

 

Vote: How do you view Merck's handling of Vioxx?¹

Painful Fallout: Tracking Merck's share price since Vioxx's launch²

Merck's statement: "We will vigorously defend" upcoming trials.³

Analysts React: The outlook for Merck⁴

Key players: Background information on the second trial⁵

Timeline: Vioxx's move from the market to the courthouse⁶

Glossary: Explanations of the key terms used in reporting on Vioxx⁷

WALL STREET JOURNAL VIDEO

 

• Merck General Counsel Ken Frazier⁸ comments on Merck's defense and the strategy for future cases. Plus, Merck spokesman Jim Fitzpatrick⁹ says the jury's verdict confirms that Merck behaved responsibly.
 
• Plaintiff Frederick Humeston¹⁰ comments on the verdict, calling Vioxx a "poison pill." His attorney, Christopher Seeger¹¹, says, "We'll look for another trial immediately." And Vioxx plaintiff attorney Mark Lanier¹² and the attorney for the next Vioxx trial discuss why Merck won.
 
• WSJ's Barbara Martinez¹³ discusses whether the Vioxx verdict means Merck is safe from future lawsuits.
 

After the verdict was announced Merck lead counsel Diane Sullivan hugged a member of the trial team and said in her ear: "Justice." Jim Fitzpatrick, an attorney at Hughes Hubbard & Reed and member of the Merck defense team said the verdict was "consistent with the evidence we presented." Investors celebrated too, with Merck stock rising sharply, up 7% to $30.40, after the verdict was announced.

Plaintiff's attorney Christopher Seeger said he "didn't understand the verdict." He said the fact that the plaintiff, Frederick "Mike" Humeston, survived the heart attack that he had blamed on Vioxx may have played a role in the jury's decision. But he added, "I hate to think people who have [nonfatal] heart attacks are not going to get justice." Mr. Seeger said Merck didn't win on science. "They won by attacking the victim."

The jury of three men and six women deliberated for a little more than a full day before delivering its sweeping exoneration of Merck. Frederick "Mike" Humeston had alleged that Merck had failed to warn the public about its safety concerns over Vioxx, which he claimed had caused his heart attack after he took the drug intermittently for two months.

The jury, which heard seven weeks of testimony, had to consider two charges: failure to warn and consumer fraud. In deciding against Mr. Humeston on the first question, it concluded that Merck either did not know that Vioxx carried cardiovascular risks at the time that Mr. Humeston was prescribed it in 2001, or that the company adequately warned physicians about those risks.

Vickie Heintz, a juror who works in the bookkeeping department for china maker Lenox Inc., said she thought Mr. Humeston had too many additional health issues and that his stress played a "big factor" in his heart attack.

Ultimately, however -- and critically for Merck -- the jury made its judgments solely on Merck's actions, not on whether Vioxx had caused Mr. Humeston's heart attack. If they had found that Merck failed to warn of Vioxx's safety risks, they would then have taken up the causation question.

In considering the claim of consumer fraud, the jury examined whether the company had misrepresented Vioxx's risks or otherwise used "unconscionable practices" in marketing the drug to physicians. It decided Merck had not done so. "We don't think that Merck did anything devious or deceptive," said juror Nellie Stetzer, a retired real-estate saleswoman.

Judy Lamando, a 41-year-old accountant, said she felt that Merck adequately warned doctors through supplementary materials. She also believed stress played a big role in Mr. Humeston's heart attack. "For them [the plaintiff's] to say stress wasn't an issue is wrong," she said.

Ms. Lamando said she wasn't moved by the inflammatory emails from inside the company or Merck's aggressive marketing of the drug. "We're all in business and that's what we do," she said.

Inside the Case

Merck's victory will resonate well beyond this particular case. The company faces more than 6,400 lawsuits and could be hit with tens of thousands more; Analysts estimate that Vioxx litigation could wind up costing it as much as $50 billion. Merck has said that it will fight each case separately in court, but many observers believe an eventual settlement is virtually certain. Merck is hoping first to strengthen its hand by gaining some courtroom victories and this is its first. In August, a Texas jury decided that Vioxx was to blame for the fatal heart attack of a triathlete who took the drug for eight months, and awarded his widow $253.4 million¹⁴.

Merck was able to show the plaintiff Mr. Humeston, a postal worker from Idaho, had a host of cardiovascular risk factors including his weight, high blood pressure and job stress. He only took Vioxx for two months, and based on his prescriptions lawyers for Merck were able to raise questions about whether he was actually taking Vioxx at the time of his heart attack.

Six more Vioxx trials are scheduled in the coming six months. If Merck can show consistently that it can win in the courtroom before next April, when a federal judge has suggested said he expects to be able to start hammering out the outlines of a settlement agreement, it will have a much stronger bargaining position.

Merck's Vioxx troubles exploded just over a year ago when it withdrew its blockbuster after finding that it was linked to increased risks of heart attacks and strokes in patients who took it for more than 18 months. Scientists outside the company had questioned Vioxx's cardiovascular safety for years, but Merck fought them off. Instead, it spent heavily to advertise and market Vioxx to doctors and consumers, making the drug a household name that generated $2.5 billion in annual sales as it was consumed by 20 million Americans.  

DESKTOP NEWS ALERTS

 

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The withdrawal generated a wave of concern about the entire class of so-called Cox-2 inhibitors and prompted calls to tighten safety standards and regulatory oversight. Pfizer withdrew one of its Cox-2 drugs, Bextra. Sales of the other, Celebrex, have plunged as result of safety fears.

Drug makers have been forced to rethink what drugs they pursue and develop, based on their anticipation of potential safety and cost problems. And they're re-examining their advertising practices.

Convincing the Jury

Merck had hoped to make the New Jersey trial a turnaround from its defense in Texas, which was widely seen as stiff. Lead Merck attorney Ms. Sullivan started and finished the trial with fluid and easy-to-understand opening and closing arguments.

Mr. Seeger, the plaintiff's attorney, attempted to use a series of damaging internal company emails, many of which appeared in the Texas trial and are likely to become a refrain in future cases, to show that Merck executives knew as far back as 1996 that Vioxx could cause heart problems. And he presented documents that capture Merck officials calculating the financial damage they would suffer from lower Vioxx sales if they went along with a request by the Food and Drug Administration for a tougher warning label.

He presented emails from Merck's former research head, Edward M. Scolnick. Following results from a March 2000 study that showed increased cardiovascular risks in some patients taking Vioxx, Dr. Scolnick wrote to colleagues that "the CV events are clearly there." In another email, he referred to people working at the FDA as "bastards," and in another he wrote that Vioxx's success was necessary "to preserve Merck."

But Merck convinced the jury that Mr. Scolnick's and other executives' concerns were a normal part of the scientific process of discovery and safety investigations. Ms. Heintz, the juror, said she felt Mr. Seeger "cherry picked" a few select emails to try and indict the company with them -- echoing the same phrase that Ms. Sullivan of Merck had used repeatedly in her closing statement Tuesday.

Juror Patricia Harley, 44, said the internal emails weren't a problem for Merck. "If someone peeked through all my emails, forget about it," she said. As to Merck's marketing: "That's business. Merck is in business to make money. You can't fault them for making money."

Merck lawyers presented Alise Reicin, for example, a scientist involved in the 2000 clinical study, which compared patients taking Vioxx to patients taking an older painkiller, naproxen. While this initially caused Merck scientists to worry, Dr. Reicin explained how she came to the conclusion that the results were attributable not to cardiovascular risk factors in Vioxx but to heart-protective properties in naproxen.

Ms. Heintz also said she wasn't bothered by Merck's aggressive marketing of Vioxx or documents that showed the company calculating the loss in profits if the warning label were changed to reflect increased of heart attack. "Medicine is business," she said. "If I had a business I would calculate what the loss of one of my big products would mean… This about making money. Merck doesn't do this because they are flower people."

Write to Heather Won Tesoriero at heather.tesoriero@wsj.com²⁰, Barbara Martinez at Barbara.Martinez@wsj.com²¹ and Paul Davies at paul.davies@wsj.com²²