Merck & Co won the first reversal of a damage award over its Vioxx painkiller after a judge found a US$51 million verdict was "grossly excessive."
US District Judge Eldon Fallon in New Orleans ordered a new trial to assess damages owed to retired FBI agent Gerald Barnett, leaving intact a jury's finding that Merck was liable for his heart attack. Jurors awarded Barnett US$50 million in compensatory damages and US$1 million in punitive damages on Aug. 17.
"It is the US$50 million compensatory damage award which the court finds grossly excessive," Fallon wrote in a seven-page decision on Wednesday. "The plaintiff is retired, and therefore cannot recover for lost wages or lost earning capacity."
Merck, the fourth-biggest US drugmaker, faces about 16,000 product-liability lawsuits over Vioxx and has set aside almost US$1 billion for litigation. The Whitehouse Station, New Jersey-based company yanked Vioxx off the market in 2004 after a study showed a higher risk of heart attacks and strokes after 18 months of use. Barnett took Vioxx for more than four years.
The verdict was the first win for a Vioxx user in federal court, and the damage award is the first against Merck to be thrown out. Since Vioxx claims began going to trial in July last year, Merck has won five verdicts and lost four. The company has vowed to fight every case individually.
"This is pretty much coming out of the Merck playbook," said Steve Brozak, an analyst at WBB Securities in Westfield, New Jersey. "They understand that the legal system is a long and winding road. The jury verdict is just the starting point."
Merck shares fell US$0.09 to US$40.80 on Wednesday in New York Stock Exchange composite trading, adjusted for the payment of a dividend of US$0.38 a share. The stock has risen 28 percent this year, valuing the company at US$88.8 billion.
"We are pleased the court agreed that the compensatory damages awarded were excessive and bore no relationship to the evidence presented in trial," Phil Beck, a lawyer for Merck with Bartlit Beck, said in a statement.
The company will seek a new trial on liability in the next several days, he said.
Fallon said Barnett, 62, has resumed many daily activities since his 2002 heart attack. Fallon didn't overturn the jury's finding that Merck was liable for the heart attack and said it was reasonable for them to conclude that Merck failed to warn Barnett and his doctors about Vioxx's health risks. Fallon also said he was "not troubled" by the US$1 million punitive award.
Those findings by Fallon will be helpful to other Vioxx plaintiffs, said Mark Robinson, a Los Angeles lawyer who represents Barnett.
"We're looking at this as an opportunity to seek a larger punitive award," Robinson said.
Fallon's decision may deter potential Vioxx plaintiffs from suing Merck before a deadline this month, said Linda Mullinex, a professor at the University of Texas School of Law in Austin.
Most states bar the filing of liability suits more than two years after a product is withdrawn. Merck pulled Vioxx from the market on Sept. 30, 2004.
"When you have either the court of first instance or an appellate court reduce the damages amount, it makes it a lot less attractive for plaintiffs," Mullinex said in an interview.
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