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Vioxx Lawsuit News

Analysts concerned about Merck's potential legal liability following the Vioxx withdrawal

November 4, 2004

Merck & Co. withdrew Vioxx from the market September 30 after finding the drug doubled the risk of heart attacks and strokes in patients taking it longer than 18 months. Following the announcement, Merck's stock plunged nearly 27 percent and the drug company lost $28 billion in shareholder value. Though part of the losses suffered was in response to the lost revenue of Vioxx, the company's second best selling drug, losses were also suffered because of the lawsuits filed in response to the drug recall.

This week, Standard & Poor's Corp. warned it might downgrade its ratings on Merck's debt because the major payouts the company may have to make. A new analysis by Merrill Lynch concluded Merck's liability could be as high as $17.6 billion over the next decade. Based on the possibility nearly 51,000 successful Vioxx related lawsuits with jury awards or settlements of $100,000 to $300,000 for patients claiming heart attacks or strokes, in addition to another $1 billion to $2 billion for nuisance lawsuits, Merrill Lynch's estimates would be only slightly offset by Merck's liability insurance of $650 million.

In addition to the heavy financial losses Merck can suffer, the company's brand and stature can suffer irreparable losses as well. The British journal The Lancet published a new analysis by Swiss researchers pooling results from 29 studies of Vioxx and finding people taking it had more than double the risk of heart attack than those given dummy pills or other painkillers. The researchers concluded Vioxx “should have been withdrawn several years earlier,” and the Lancet editor Dr. Richard Horton wrote in a commentary that, “the unacceptable cardiovascular risks of Vioxx were evident as early as 2000.”

Horton faulted Merck for having “astonishing failures” in monitoring Vioxx safety and the FDA for “lethal weaknesses” in oversight. The FDA has received a lot of criticism, alongside Merck, for the failure of implementing an earlier Vioxx recall.

The FDA released a study on Tuesday, November 2 that Vioxx may have contributed to an additional 27,785 heart attacks or deaths from 1999 to 2003 that might have been avoided if patients were taking Pfizer's Celebrex. The study analyzed medical records of 1.4 million adult members of Kaiser Permanente, the nation's largest HMO. Twenty million Americans took Vioxx before its recall announcement was made.

For more information on the Vioxx recall, contact us to confer with a Vioxx lawyer.