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Merck loses its third lawsuit over Vioxx

Drug maker ordered to pay $32 million to a Texas family

A jury yesterday awarded $32 million to a Texas family in the third finding that Merck & Co.'s Vioxx painkiller caused a heart attack.

Jurors in Rio Grande City, Texas, found Vioxx was a cause of the death of Leonel Garza, 71, in April 2001. Merck failed to warn of the drug's risks before Garza started taking it, the jury found in awarding damages to his family. The amount will probably be reduced because of a state punitive damages cap.

Merck, facing 11,500 Vioxx suits, has been hit with three multimillion-dollar jury awards totaling $298.3 million. The law limiting punitive damages in Texas, where two of the trials occurred, cuts the likely total liability to $47.4 million.

''They're going to have to face lots of these, and so far their track record hasn't been that great," Jon Paul LeCroy, an analyst with Natexis Bleichroeder in New York, said in a telephone interview after the verdict. ''This will be a long battle for Merck."

Shares of Whitehouse Station, N.J.-based Merck, the number four US drug maker, yesterday fell 26 cents, or 0.74 percent, to $34.74 in New York Stock Exchange composite trading. They fell as much as 1.6 percent immediately after verdict was announced.

The jury, voting 11 to 1, awarded $7 million to Garza's widow and three sons for mental anguish and the loss of his companionship. Punitive damages were set at $25 million by the jury. Texas law limits punitive damages to $750,000 for noneconomic losses, the kind found by the jury. The Garza family didn't claim any economic damages from the retiree's death.

Family members declined to comment after the verdict.

''Obviously we are disappointed," said Merck lawyer Richard Josephson of Baker Botts in Houston. ''We thought that the facts were overwhelming. We will be vindicated in either posttrial motions, or we will be vindicated on appeal."

''We are very pleased that the jury understood the depth of the deception by Merck," said Kathy Snapka, one of the Garzas' lawyers.

David Hockema, another lawyer for the family, said before the verdict that his clients can argue in an appeal that the limit on punitive damages should have been ignored because of another law.

The cap doesn't apply to ''conduct described as a felony" when an elderly person is deliberately or recklessly harmed, the family's lawyers argued before the jury deliberations, citing a state law. But Judge Alex Gabert said the trial evidence showed the statute didn't apply in the Garza case.

Merck withdrew Vioxx in 2004 when a study showed the medicine doubled the risk of heart attacks after 18 months of use. The company has set aside $970 million for legal costs and nothing for damages, vowing to fight cases rather than settling.

''This is a big reversal and really exposes their litigation strategy as being extremely flawed," Chris Seeger, a lawyer for people suing Merck who wasn't involved in the Garza case, said of the verdict. ''Now they have people with one week's worth of use getting verdicts in the $20 million, $30 million range."

The three Vioxx losses haven't left company officials discouraged about the litigation, Merck general counsel Ken Frazier said yesterday. ''Our record after six cases is one I'm satisfied with," he said on a conference call after the Texas verdict.

The drugmaker will continue fighting each case individually, Frazier said.

''We have both the resources and resolve to see this litigation through," he said.

Garza's heart disease was diagnosed in 1978. He suffered his first heart attack in 1981 and fought the disease for years with procedures including bypass surgery and the insertion of a stent.

He first took a seven-day supply of Vioxx and later got a 30-day prescription, his family testified. He died five years ago yesterday.

''Less than a month before he died there were no clots, and there was good blood flow to his heart," the family's lawyer, Joe Escobedo, told jurors in his closing argument.

Lawyers for the family said Merck rushed the drug to market without proper testing, ignored red flags about its safety, and didn't disclose its risks.

''We presented the jury with evidence that showed Merck, quite frankly, was more concerned with protecting the drug than protecting the people going to take the drug," Escobedo said.

Merck said it properly researched the drug and issued the proper warnings when it started selling Vioxx. There was no evidence Garza took the drug for more than eight days and it was out of his system when he died, the company said. Merck lawyers blamed Garza's history of heart disease for his death.

''Merck is not this bad, evil company that they're trying to paint," company attorney Baldemar Garza, a Rio Grande City lawyer unrelated to the plaintiff family, told jurors in his closing argument. ''These are some of the smartest people in the world, because they're doing things that some of us can't even dream of."

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