Texas jury in first Vioxx trial awards $253 million

A Texas jury on Friday found drug maker Merck & Co. Inc. negligent in the death of a man who took its popular painkiller Vioxx and awarded his widow $253 million (Lm89 million) in the first of thousands of Vioxx lawsuits to go to trial.

The stunning verdict was certain to be greatly reduced under Texas law, but Merck's stock fell sharply as investors feared it could set a precedent for more than 4,200 lawsuits charging that the company hid the drug's health risks.

Merck pulled Vioxx off the market last September, saying its long-term usage could double users' risks of heart attack or stroke.

Merck shares fell $2.35 (Lm0.83c), or 7.73 per cent, to $28.06 (Lm9.90) and put a damper on the Dow, which ended up just 4.3 points to 10,559.23.

The case filed by widow Carol Ernst charged that Vioxx had caused her husband, Robert Ernst, a 59-year-old marathon runner, who took the drug for eight months, to die of a heart attack in 2001.

Merck disputed the accusation, saying an irregular heartbeat and clogged arteries killed Ernst, not Vioxx.

But the 12-member jury in Texas state court voted 10-2 that Merck should pay $24 million to Carol Ernst for mental anguish and loss of companionship and $229 million in punitive damages.

Merck attorney Jonathan Skidmore said the company would appeal the decision, but estimated that even if it is upheld the punitive damages would be trimmed to less than $2 million.

Texas law limits punitive awards to two times economic damage - in this case $450,000 - plus up to another $750,000. There is no financial limit for loss of companionship and mental anguish.

At the reading of the verdict in the six-week-long trial, the courtroom erupted in an uproar and Ernst broke into tears. Her lawyer, Mark Lanier, leaped up and shouted "Amen".

Lanier urged Merck to settle the pending Vioxx lawsuits, not fight them. He vowed to file more lawsuits against Merck and "pound them again".

Merck general counsel Kenneth Frazier said the company would fight on, not settle. "There are other Vioxx cases coming to trial, and we will vigorously defend them one by one over the coming years," he said.

Skidmore said Merck's appeal would be based on, among other things, scientific arguments. Juror Derick Chizer, 43, said the jury, which deliberated for almost two days, knew their award probably would be cut, but felt Merck needed a jolt to change its ways.

Another juror, Stacy Smith, 21, said she was shocked at evidence that showed the company knew the dangers of Vioxx long before they took it off the market. The arthritis drug had been taken by about 20 million people at the time of its recall and contributed more than $2.5 billion in sales for Merck in 2003, about 10 per cent of the company's total revenue.

Vioxx is the trade name for rofecoxib, part of a class of drugs called NSAIDs. A type of painkiller known as a COX-2 inhibitor, it was touted as a pain and inflammation reliever that did not cause ulcers or gastrointestinal bleeding, a side effect of many NSAIDs.

Due to the pending lawsuits, Merck said at the end of last year it had set aside $675 million to help cover legal costs.

Another Vioxx trial is set to begin on September 12 in New Jersey, where Merck is based. Wall Street analysts, who have been closely watching the case in Angleton, a small town about 65 km south of Houston, say Merck's legal woes will last for years and liability in all the cases could run into billions of dollars.

Lawyer Jerry Reisman, a class action attorney in Garden City, New York, said the case also may prompt many more lawsuits.