A Stitch in Haste

The first Vioxx judgment against Merck is in, and it's ugly: (WSJ - $)

The jury awarded awarded the man's widow $24 million in actual damages, plus $229 million in "exemplary," or punitive damages, for a total of about $253 million.

A jury of seven men and five women ruled against Merck on each of three key questions. They found Merck failed to warn doctors of the Vioxx's danger, that the drug was improperly designed, and that Merck's negligence caused Robert Ernst's death.

The first question, failure to warn, is a perfectly valid allegation to make against a pharmaceutical company or any other manufacturer. See Restatement of Torts (Third), Section 10.

The second question, defective design, is almost totally untenable in the pharmaceutical context and certainly not applicable to Vioxx or the other COX-2 inhibitors.

I discussed this issue on November 15, 2004, in a blogpost titled, COX-2: "Heart Attack for an Ulcer." I am reposting it below.

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Merck got a one-two punch from the New York Times and 60 Minutes, both of which smelled blood in the water and had major reports on the Vioxx recall, about which I have blogged previously.

No full-blown fisking here; I just want to focus on one dangerous meme in both reports:

NYT: "A heart attack in exchange for an ulcer is a poor treatment," said Dr. Ray, who is now consulting with lawyers suing Merck.

60M: "to have a medicine that's causing heart attacks and strokes is something that can't be tolerated," says [Dr. Eric] Topol.

Hogwash.

Of course, the sleight-of-hand behind these two quotes is the failure to put the risks from Vioxx (or any other pharmaceutical) into a probabilistic context.

We like to use the shorthand that a drug "causes" side effects. But in reality, the most that can typically be said is that a drug may increase the likelihood of a side effect. And the probabilities are often minuscule. If taking Vioxx increases your risk of suffering a heart attack from 1 in 10,000 to 3 in 10,000, then yes it "triples" the risk, but the risk remains extremely small.

So is the drug worth the risk or isn't it? The answer is, of course, "it depends."

Let's say you have a patient with severe rheumatoid arthritis who also has a history of serious gastro-intestinal illness but has no risk factors for heart attack or stroke. It would be totally inappropriate, both medically and legally, to say it is automatically and inarguably wrong to give that patient Vioxx.

I have blogged before about the law regarding defective drugs, but to review: A product is only "defective" for one of three reasons: defective manufacture (think "flu vaccine"), defective design or defective labeling (i.e., failure to warn).

In the case of pharmaceuticals, "defective design" has an extremely narrow meaning: "no reasonable health care professional would prescribe the drug for any class of patient under any circumstances."

Notice how the Vioxx opponents are trying to steer the debate in that direction by claiming that any increase in cardiovascular risk automatically makes a drug "unsafe" or "dangerous." That has never been the standard for product liability in pharmaceuticals, nor should it be.

Let me be excruciatingly clear on this: at first glance at least, it does look like Merck may be liable for Vioxx under the third prong of pharmaceutical liability (failure to warn / improper labeling). And perhaps liability will be found on other legal theories, especially fraud. But the plaintiff's bar must not be allowed to rewrite the law regarding defective design by parading a string of biased physicians who engage in hyperbole and histrionics by misstating the nature of pharmaceutical risk.

If Merck turns out to be liable under traditional legal theories, then yes, hang the company out to dry (I'm more concerned about hanging the plaintiffs out to dry — see my previous post). But Vioxx's critics must be held to the same standard of intellectual honesty that they now claim Merck failed to maintain.

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I think Merck will be subject to enough liability just for the failure to warn claims (there are already something like 4,000 Vioxx lawsuits, and undoubtedly countless more will be filed once personal injury lawyers start airing "Have you or a loved one..." commercials with "$253 million" in a huge font across the screen.

So be it. But let's not bankrupt the company, as some lawyers will undoubtedly seek to do, by adding on frivolous "defective design" actions. Vioxx may have been defectively labeled, but it was not, and could not possible have been, "defectively designed."

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Meanwhile, Point of Law Forum discusses the nature of the damages award.

Yesterday's jury award against Merck, the manufacturer of Vioxx, was $253 million. To make the math easy, let's just call that a quarter billion dollars.

At the time Vioxx was pulled, Merck had been estimating sales of slightly under $3 billion per year.

Merck introduced Vioxx in 1999.

So Merck's total Vioxx revenues (not gross margin, mind you, but mere revenues) were, at most, $3 billion times six years, or $18 billion.

So at a quarter billion per plaintiff, that would suggest that only the first 18 x 4 = 72 plaintiffs should receive any recovery.

There are already 4,000 Vioxx-related lawsuits; far more will undoubtedly be filed as soon as personal injury lawyers can revise their "Have you or a loved one..." commercials to have "$253 million" flash across the screen.

Or try another metric: Merck's equity market capitalization after Friday's close was $61.6 billion. So at a quarter billion per plaintiff, that would suggest 61.6 x 4 = 246 plaintiffs should recover damages.

For the rest, too bad so sad.

Forget the fact that the punitive damages award is per se excessive under Texas law.

Forget the fact that the "victim" in the Texas case (the plaintiff was his widow) died from a cardiac condition that has never been linked to Vioxx.

Forget the fact that the plaintiff had only been married to the victim for one year.

A jury has made its decision (by a vote of 10-2; federal civil verdicts, by contrast, must be unanimous).

I sat on the fence regarding professional jurors before this case. Now there can be no doubt. In civil cases where a minimum quantum of intelligence and education are required to evaluate the facts and apply the law, and where enough damages are at stake to preclude future plaintiffs from having their day in court because moron "send a message" juries issue awards that would bankrupt a defendant long before other plaintiffs have time to even draft a complaint, we must either have professional jurors or raise the standards for jury service high enough to keep morons off the jury pool altogether.

Too much is at stake.

Far more detail at Point of Law Forum, including more on the disgraceful incompetence of this particular jury. See also Ideoblog.

I repeat: Professional juries, or higher standards for lay juries, in complex civil litigation with high potential damages. Now.

Too much is at stake.

POST SCRIPT: On a lighter note, I'm reminded of this scene from an episode of "The Practice," with a cameo by Joseph Campanella as the judge, over a cockroach in a restaurant --

FOREPERSON: Jacobs versus WYPR Broadcasting Company, on the grounds of fraud, we find in favour of the plaintiff and order the defendant to pay damages in the amount of two hundred thousand dollars. We further order the defendant to pay punitive damages in the amount of eighteen million dollars.

JACOBS: What? Did she say eighteen million???

CAMP: Order!!! Order!!! Order!!! You gotta be kidding me. You jackasses.

BOBBY: Your Honour, I'm not sure if that's ... appropriate.

CAMP: Eighteen million dollars, what the hell is that? You find for the plaintiff, okay. Personally I disagree, but I was prepared to let it stand. But eighteen million? That's sounds to me like there's bias going on. You seem like very nice people but... I'll let the verdict stand, tempted as I am to vacate it. But I'm cutting the damages to two million. You, sir, should accept it and smile. Now, I'm going to go for a walk. Any luck, I'll get nicked by a bus, sprain a knee, file a claim, get rich and retire to the Bahamas. Adjourned.

If there are any 0L's out there, this is a good opporunity to pre-learn about remittitur.

The New York Times:

Merck deserves some sympathy, but not a lot, for the staggering loss it suffered last week in a case involving its painkiller Vioxx, which was withdrawn from the market because it raises the risk of heart attacks and strokes in a small percentage of patients.

I think the people at Merck would be the first to say that they are not seeking "sympathy," but merely a fair and accurate application of the law.

They didn't get it in the Ernst case, because they were left to the irrational, contra-legal whims of a moron jury.

Have "sympathy" instead for the 20 million COX-2 users (sorry, "former users") who are being denied the opporunity to make an informed decision about whether to continue taking the pain killer.

Have "sympathy" for all the people, perhaps including you, who will be denied access to some future drug because of the chilling effect the COX-2 regulatory and legal debacle will likely have on pharmaceutical research and new drug introduction and advertising.

But don't have "sympathy" for Merck. They don't need it. What they need is a functional legal system.

UPDATE: USA Today also comments on jury "sympathy" --

Jurors are often swayed by sympathy or a slick presentation from an expert witness or attorney. Litigation becomes jury-by-jury roulette. An alternative worth considering is special health courts, where judges experienced in medicine try cases without juries. The judges would select impartial experts and write opinions that set precedent.

Makes sense to me.

Many blawgers, myself included, fear that the number of lawsuits against Merck over its painkiller Vioxx will explode after the disgraceful and partially invalid $253 million dollar judgment against the company.

The number we were all using last week was that there were already about 4,000 lawsuits going into the trial.

We were wrong. (WSJ -$)

The tally of product liability and purported class action suits over Merck's withdrawn painkiller Vioxx was calculated at a hearing in U.S. District Court for the Eastern District of Louisiana. According to the figures, Merck faced 4,951 state and federal product liability and purported class action suits involving Vioxx as of Aug. 15, up from approximately 4,295 cases as of July 11.

Lawyers believe last Friday's verdict against Merck — which is expected to be reduced to around $26 million under Texas law — will encourage still more lawsuits against the Whitehouse Station, N.J. drug company. The number of lawsuits filed since the verdict couldn't be determined.

In the week since the Ernst verdict, I have seen several references to 10,000 potential lawsuits. If that was based on a starting figure of 4,000, that might suggest 12,500 total lawsuits based on the upwardly-revised 5,000 figure.

Merck intends to fight every single one. That's laudable, but it's also expensive. Keep that in mind the next time you're not taking a new drug, because it hasn't been discovered yet, because the pharmaceutical industry had to divert funds from research & development to litigation.

UPDATE: Merck is now reportedly considering settling some lawsuits that fit a "narrow profile" --

Merck's general counsel, Kenneth C. Frazier, told The New York Times in Friday's editions that Merck would consider settling suits brought by people who took Vioxx for long periods of time and had few other risk factors for heart disease.

Keep in mind that the decision to settle a lawsuit does not depend exclusively on whether a litigant believes he is right or wrong legally. It is a mathematical lottery based on the probability of winning or losing, which is in turn a function of the litigant's confidence in the legal system and the potential damages involved. Now that Merck's confidence in juries is understandably at or near zero, settling high-risk cases may make perfect sense, regardless of whether Merck thinks it should prevail in all cases.

On the other hand, I can just imagine the next gaggle of jackasses in a Merck trial jury room: "Well, if they settled other cases, then that means they know they're wrong — time for another quarter billion dollar verdict to 'send a message!'"

Here's a fact pattern that every law school student comes across:

You are involved in an automobile accident that is 100% the other driver's fault -- call him Defendant #1. You suffer a broken arm that will result in $10,000 worth of compensatory damages.

You are put into an ambulance. On the way to the hospital the ambulance is itself in an accident that is also 100% the other driver's fault -- call him Defendant #2. You suffer a broken leg that will result in $50,000 worth of compensatory damages.

Question: If for whatever reason you choose to sue only Defendant #1, how much can you sue him for -- $10,000 or $60,000? Likewise, if you choose to sue only Defendant #2, can you sue him for $60,000 or only $50,000?

Answer: The general rule is that you can sue Defendant #1 for the entire $60,000, since he proximately caused both the first and the second accident. The negligence of the second driver does not break the chain of causality. But of course Defendant #2 cannot be held liable for the first accident -- he was not there and in no way caused it. So, in general, a defendant can only be held responsible for damages occurring after the negligent act, but not before.

Keep all that in mind when you read about the most recent Vioxx verdict, Garza v. Merck:

If you've been relying entirely on AP or national press coverage of the Garza case, you perhaps do not realize what a giant miscarriage of justice it is.

Not just that, by the Garza's own theory of the case, Leonel Garza had been taking Vioxx for under a month.

Not just that Leonel Garza was a 71-year-old smoker who was overweight, had high cholesterol, and previous [sic] had both a heart attack and a quadruple bypass, yet was awarded $7 million in "compensatory" damages.

But the fact of the matter is that there is no documentary evidence that Garza was even taking Vioxx. Garza never had a prescription for Vioxx.

Read the whole thing.

Let's assume that Garza had, contrary to all evidence, actually taken a few Vioxx pills. They did not "cause" Garza's heart attack any more than Defendant #2 "caused" your broken arm in the hypothetical. Mr. Garza's age, weight, smoking and poor health caused his heart attack. If anything, the Vioxx -- again, assuming Garza ever took any -- may have slightly worsened his condition or slightly increased the already extant risk of Garza's heart attack. It is therefore totally inappropriate to hold Merck liable -- even assuming it should be held liable at all -- for the totality of Garza's heart attack or his death, just as Defendant #2 cannot logically be held responsible for the totality of your injuries in the chain of accidents.

Assuming Garza even took Vioxx, and assuming that Vioxx really contributed minimally to Garza's self-inflicted coronary, then the most that could have be reasonably awarded was some token amount, perhaps $1,000 per pill (Garza took no more than 15 pills), representing the incremental injury caused by the drug. This case, almost certainly worth zero, was clearly not worth $32 million.

This was a very scary verdict. It went against the weight of the evidence and every established rule of causation and liability in tort law. It was nothing less than a violation of due process. Let's hope the appellate courts make that clear.

More thoughts from Coyote Blog.

Wired Science Blog is shocked, shocked to learn that a scammer can actually sell sugar pills as a panacea:

In the last year, Texas-based Mannatech has sold over $415 million worth of its flagship pharmaceutical [sic], Ambrotose. They've relied largely on word of mouth and customer-to-customer sales, with Mannatech providing scientific information about the mechanism that allegedly makes Ambrotose effective against everything from HIV to cancer.

So what exactly is in Ambrotose? Sugar. And while Mannatech cites as evidence for Ambrotose's effectiveness the emerging field of glycobiology, which has shown how important sugar is to cellular communication, the field's leading researchers say that people already produce all the sugar they need.

Yes, there are indeed unethical "capitalists" who prey on the gullible. Point conceded. On the flip side, no honest libertarian would argue that there is a "right to use false advertising."

Meanwhile, here is the comment I left at WSB:

What is your basis for calling it a "pharmaceutical," since Mannatech is almost certainly not calling it that themselves (the label clearly says "dietary supplement")?

The point is relevant precisely because the FDA goes out of its way not to regulate scams such as this, while they do not hesitate to hesitate when it comes to approving new bona fide pharmaceuticals.

To the extent that there should even be an FDA, its pharmaceutical regulatory powers should be derived from economic efficiency arguments. Specifically, if the FDA determines that a drug is "safe and effective" (which are precisely the criteria for FDA approval today), then the manufacturer -- assuming no malfeasance in the approval process -- should be forever shielded from product liability resulting from that drug. In other words, no judge or jury should ever be allowed to find that an FDA-approved pharmaceutical is "defective" in a product liability lawsuit.

The "no malfeasance" qualifier is important: a pharmaceutical company that lies to the FDA -- or to physicians or consumers -- should obviously get sued up the wazoo if something goes wrong with their drug; that's a different fact pattern altogether. And if the FDA somehow drops the ball, then let it be sued, not the drug companies.

As for these rip-off supplements, "nutraceuticals" and the like: the opposite of "safe and effective" is "harmful or useless." But that of course should not be the standard for FDA regulation. It's a tempting warm fuzzy feeling to insist that "the government should do something" about the very existence of useless products such as Ambrotose (apart from any misleading claims -- again, that's a very different issue). But in reality the government has no business protecting fools from themselves. Being fooled is not synonymous with being defrauded. The latter falls within the proper scope of government; the former does not.

Those knowledgeable about such things can and should expose Ambrotose for what it is. But they should stop short of breaking out the governmental sledgehammer over it.