Vioxx Drug Liability - A New Mass Tort.
Medical & Legal Perspectives
Guerry R. Thornton, Jr.
Copyright © - Guerry R. Thornton, Jr. 2004
The withdrawal of Vioxx by Merck will spawn a massive wave of litigation related to cardiovascular problems linked to the drug. Vioxx was recalled on September 30, 2004, following studies that indicate users are twice as likely to suffer heart attacks and strokes than people who take other anti-inflammatory drugs. The recall is the result of mounting concern by experts that the drug might be related to cardiovascular risks. Concerns about the safety of Vioxx began in early 2001. In April of 2002, the FDA required Merck to add new label warnings for cardiovascular risks.
Merck's decision to recall Vioxx is based on a three-year clinical study. More than 20 million people have taken Vioxx since it was launched in 1999. Sales of the drug reached $2.5 billion last year. The study found that users of the 25 milligram dose of Vioxx for more than 18 months were twice as likely to have a heart attack or stroke as patients taking a placebo. The study estimates that approximately 27,785 heart attacks and cardiac deaths may be related to Vioxx. Researchers had been concerned about the safety of Vioxx for years. Merck had criticized previous studies as inconclusive and not based on placebo-controlled clinical trials.
VIOXX - A NEW MASS TORT
The rapid growth in claims involving hazardous drugs has played a major role in the evolution of mass tort litigation. The public is acutely aware of the billions of dollars paid to thousands of Dalkon Shield, breast implant and diet drug victims. When a drug is recalled due to health concerns, it is standard practice for claims to quickly enter the legal arena. Within hours of a recall, law firm articles are posted to advance litigation and protect the rights of victims.
Vioxx claims will result in thousands of suits, including class actions, injury claims, multi-district proceedings, appeals and a litany of rulings that will affect public health and tort law for years. The response by the legal community to the Vioxx recall will be swift and pervasive, and may ultimately result in compensation plans that rival the implant and diet drug settlements, now recognized as some of the largest in history.
Hazardous drug liability can be enormous and affect a drug company for years. The announcement alone cut Merck's stock price by 20%. Billions in stockholder equity were lost. History tells us that this type liability can damage a company for 4 to 20 years. Other mass disasters, such as Fen-Phen and breast implants, resulted in legal overhangs that not only damaged the product maker, but had an adverse impact on others as well, ranging from doctors to FDA investigators. One week after the recall, legal and financial prognosticators were debating Merck's liability, with one risk assessment placing the Vioxx exposure at $10 billion or more. See, "Vioxx Lawsuits", Oct. 5, 2004, The Wall Street Journal, by Barbara Martinez.
As a stark reminder of how uncertain mass tort liability can be, the diet drug exposure of Wyeth was placed at around $4.5 billion in 1999. After six years of litigation, Wyeth has increased its assessment and has set aside over $14 billion to cover claims. The final payout is still uncertain as claims have climbed to over 600,000. Wyeth's risk may relate to funding for the Fen-Phen settlement trust and claims could go higher depending on the size and number of jury awards. Liability risks in mass tort litigation are notoriously hard to predict. The biggest liability case of all, asbestos, has confounded experts for decades. Experts have pegged asbestos exposure at anywhere between $80 billion to $250 billion.
THE LEGAL RESPONSE
The chain of responsibility begins with Merck, and it can ultimately lead to pharmacies and health care providers. As health concerns first surfaced in 2001 and the FDA required cardiovascular warnings in 2002, an injured party can pursue many options. First, class actions can seek medical monitoring and refunds, but cannot provide fair awards for pain and disability. Thus, victims usually rely on direct suits to achieve the optimum results, which may include the specter of punitive damages under allegations that Merck had advance knowledge of heart dangers and failed to warn Vioxx users.
A large number of suits can result in supervision by the Panel on Multi-District Litigation under 28 U.S.C. Sec. 1407 for the purpose of transferring federal cases to one venue to coordinate discovery and to achieve consistency of rulings and judicial economy. See, In Re Diet Drug Litigation, MDL No. 1203 (ED PA). The MDL judge will exercise enormous control over proceedings. In the implant case, the large number of claims justified MDL status. See, Breast Implant Litigation, MDL 926 (USDC AL). The transfer resulted in a "global settlement" with complex rules, a claims process and control over future suits. Judges can also become "gatekeepers", and can screen testimony to make certain experts are "reliable" and "qualified".
The diet drug and implant experiences show how Vioxx claims might play out in the courts. Each case involved thousands of claimants with injuries ranging from minor to severe. Lower level victims can often benefit from a common resolution plan, but the seriously injured can be held hostage by restrictive rules that may not provide a fair remedy. Although the right to a jury trial is protected, serious claims may have to wait years and must comply with complex pre-trial options before they get their day in court. Because federal oversight limits how individual cases proceed, many Vioxx victims may choose to file in state court and proceed against pharmacies or health care providers. Claims relate to failure to warn, negligence, strict liability, and disregard for consumer safety. See, Wells v. Ortho Pharmaceutical Corp., 615 F.Supp. 262 (ND GA 1985).
Once a claim is discovered, it must be brought within a certain period of time after injuries are manifest (two years in Georgia). In a claim against a doctor, the bar date may run from the date of negligent therapy. See, O.C.G.A. Sec. 9-3-71. The decision to file requires a full legal-medical review. If a victim is a class member, an action will only involve filing a claim form. Vioxx claims in federal court will probably be supervised by an MDL judge. In serious cases, a plaintiff may want to keep the case in state court for the best result, with the right to utilize rulings from the federal system. In many mass tort cases, awards in state jury trials have been much larger than values in MDL settlement plans.
Merck will be expected to take an aggressive stance and focus on alternative medical causes related to heart disease. Because heart disease involves genetic and life-style factors, Merck will challenge the proximate cause between Vioxx and cardiovascular events alleged in a claimant's suit. The company may also attempt to limit mass filings by fighting minor or problematic cases and paying fair compensation in viable, serious claims to avoid highly publicized jury awards and punitive damages.
One critical factor which will determine the size of the Vioxx litigation and the ultimate exposure of Merck will be the number of existing claims and the extent of future liability. Because the drug may clear out of the system after 10 days of usage, serious claims (heart attacks, death, ischemic strokes) may be identifiable in the first stage of litigation. Also, plaintiff's lawyers may focus on catastrophic injuries and not bundle serious claims with minor ones. In other drug cases, such as Baycol, the defense made it difficult to prosecute mid-level injury claims because of the cost of litigation versus succeeding at trial. The cost-benefit analysis may limit the total number of Vioxx cases with the majority of claims being pursued falling in serious injury categories. If this transpires, the litigation may be more manageable than prior mass tort cases, such as Fen-Phen.
Vioxx victims will face challenges and great opportunities as the court system responds. A victim is usually faced with one suit based on death or irreparable injury. Now, the judiciary handles thousands of mass tort claims, and courts can fashion resolution options, ranging from medical benefits and health monitoring to matrix value settlements and jury trials. The seriously injured should be afforded special rights, including the expediting of claims and a full jury trial.
As the Vioxx saga plays out in the courts, the lessons of Dalkon Shield and its progeny should be improved so that those with serious claims are given priority and not treated equally with low-level and mid-level injury claims. As the dust settles from Merck's recall, courts will render decisions that protect the rights of all litigants.
GUERRY R. THORNTON, JR., c/o NETLAW.NET
750 Park Avenue, #18-South
Atlanta, GA 30326
Guerry R. Thornton, Jr. is a lawyer in Atlanta and a member of the State Bar of Georgia; he has prosecuted claims in the $2.5 billion Dalkon Shield Plan and the $4.5 billion Fen-Phen settlement; he has published articles on mass tort litigation in Trial and The National Law Journal; his internet site is: www.netlaw.net
For more information, contact Mr. Thornton at:
404 467 1670, or 404 933 0298