Merck Loses Vioxx Case

A Texas jury awards the plaintiffs a total of $32 million in damages.
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Updated from 3:45 p.m. EDT

A Texas jury decided Friday that

Merck

(MRK) - Get Report

was responsible for the death of a 71-year-old man who had taken the drugmaker's blockbuster painkiller Vioxx.

The jury found that the family of Leonel Garza deserved $7 million in compensatory damages and also hit Merck with $25 million in punitive damages. Garza died of a heart attack in 2001.

Texas law will limit the punitive award to $750,000 because the plaintiffs didn't prove any economic damage, Merck said. The case was the sixth Vioxx trial in which a verdict has been reached. Merck has prevailed in three cases and lost the other three.

Not surprisingly, Merck said it was disappointed in the jury verdict. The company plans to appeal both the compensatory and punitive damages awards.

"We have strong points to raise on appeal and are hopeful that the appeals process will correct this verdict," Kenneth Frazier, Merck's general counsel, said in a statement. "Merck is in this for the long term. We have the resources and the resolve to address these cases, one by one, over many years."

Merck, based in Whitehouse Station, N.J., pulled Vioxx from the market in September 2004 after a study showed it could be linked to the increased risk of cardiovascular problems if it was taken for more than 18 months.

Attorneys for Merck contended that Garza's fatal heart attack wasn't caused by the drug.

"There is simply no reliable scientific evidence that Vioxx caused Leonel Garza Sr.'s heart attack," Richard Josephson of Baker Botts, the lead attorney for Merck's defense team, said in a statement. "It is also clear that Merck provided to the U.S. Food and Drug Administration all required information about Vioxx. There was no evidence that Merck acted with gross neglect, and under Texas law that means punitive damages should not have been awarded."

Shares of Merck closed down 26 cents, or 0.7%, at $34.74.

Merck said testimony during the trial showed that Garza had heart disease for more than two decades, had a heart attack in 1981 and underwent quadruple-bypass surgery four years later. Garza was also a cigarette smoker.

"The case was tried in the Rio Grande Valley, described as a 'Plaintiff's Paradise' by the

Associated Press

and cited as the nation's most difficult jurisdiction for corporate defendants by the American Tort Reform Association," Merck said. Judge Alex W. Gabert presided over the case.

The company said the only known documentary evidence shows that Garza took Vioxx for no more than a week. The lawyers for his family said he took the drug for nearly a month. The Garza verdict was read five years to the day that he died.

Merck has said it will fight each case individually, and Frazier repeated that position on a conference call after the verdict became known. Merck said Thursday, when it

reported its quarterly earnings, that as of March 31 it was named in about 11,500 lawsuits in which roughly 23,350 plaintiff groups are alleging that personal injuries resulted from the use of Vioxx.

The company is also a defendant in around 190 supposed class actions claiming personal injuries or economic loss.

Josephson said on the call that he believes the Garza verdict will be thrown out. Frazier said he was satisfied with the company's record thus far in the six trials. He emphasized that even the cases Merck has lost are still in the early stages of litigation because they've only been decided at the verdict stage and haven't yet been through the appeals process.