Analysts Predict Merck’s Vioxx Liabilities Could Hit $50 Billion
In Wake of Texas Verdict, Estimates Almost Double Those Previously Anticipated

After Merck & Co. was assessed a $253+ million verdict in the first trial in August 2005, financial analysts began adjusting their estimates on the size of future jury awards or settlements. Prior to the trials, the payout by Merck was predicted to be between $100,000 and $300,000 for each lawsuit, for a potential total payout of $2 billion. With the end of the landmark trial, analysts’ estimates have escalated to as high as $50 billion.

The primary reason for the revised estimates is attributed to the loss by Merck and Co. of its first wrongful-death verdict in a Vioxx case. In Carol A. Ernst, et al. v. Merck & Co. Inc., the plaintiff’s claim was not considered especially strong and the drug company thought the case winnable. However, the Texas jury awarded the family of Robert Ernst $24.4 million in actual damages and $229 million in punitive damages. The final award will not exceed $26.1 million due to Texas caps on punitive damages.

Analysts anticipate that the loss will continue to spawn significantly more claims against Merck. Before the trial, approximately 4,200 cases were filed against the drugmaker and the current claim estimates now top 5,000. An August 22, 2005, Forbes.com article states that the total liability for Merck could approach $50 billion.

Merck has consistently declared that they would fight each personal injury lawsuit. However, on August 26, 2005, Merck officials stated that the company will now consider settling some Vioxx cases, specifically those claims where plaintiffs took the drug for at least 18 months and had few other risk factors for cardiac disease. Analysts say that this swift change in strategy may not help Merck in the long run because there is no guarantee that settling cases will save the company time and money.

The second Vioxx trial is scheduled to begin in Atlantic City on September 12. Citing pre-trial publicity, Merck & Co. had requested a 45-day delay, but that request and others were rejected by a New Jersey judge. The Superior Court Judge who oversees the nearly 2,500 Vioxx product liability cases that have been filed in that state also rejected Merck motions that included excluding some of the company’s marketing and promotional materials related to Vioxx, as well as information related to the plaintiff’s Vietnam record of valor.

Merck’s first trial in federal court is slated to begin Nov. 28 in New Orleans.

Brown & Crouppen is actively investigating and filing Vioxx lawsuits. Please contact us for a free case review if you or a loved one have been injured by Vioxx or if you would like additional information.


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