Merck has no Plan to pay Vioxx Victims

Evelyn Pringle April 30, 2007

In 2006, Merck spent $500 million, including $175 million in the fourth quarter, in legal defense costs worldwide related to Vioxx litigation, according to SEC filings.

In addition, after reviewing actual costs and estimating future costs, the company says it has recorded a charge of $75 million to increase the reserve for future defense costs related to Vioxx to $858 million as of December 31, 2006.

However, although the legal team obviously plans to get paid well, there is no indication that Merck plans to pay any money to people injured by Vioxx because, according to the filing, Merck has not established any reserves for potential liability related to Vioxx.

Judging by the win-lose scorecard for Vioxx, it appears that juries are ignoring Merck’s culpability in placing a lethal drug on the market with full knowledge that people would be injured and killed and that 100s of thousands of Americans were in fact injured and killed.

People who may have forgotten how much damage was done while Merck was raking in billions of dollars off Vioxx should go back and read the transcript of a November 19, 2004 hearing before the Senate Finance Committee, where Dr David Graham, a career scientist at the FDA who has no dog in this hunt, stated, “Vioxx has been a disaster.”

“This is unparalleled in the history of the United States,” he testified.

To give a clearer picture of the Vioxx disaster, he described the harm in relationship to the number of Americans who took the drug and experienced heart attacks and strokes. Based on an estimated range of 88,000 to 139,000 people, Dr Graham said, “Of these, 30 to 40 percent probably died.”

He also offered a hypothetical scenario to help members of the committee recognize the magnitude of injuries and deaths caused by Vioxx, stating:

“Now, imagine that we were talking about jetliners. If there were an average of 150 to 200 people on an aircraft, this range of 88,000 to 139,000 would be the rough equivalent of 500 to 900 aircraft dropping from the sky. This translates to two to four aircraft every week — week in, week out — for the past five years.”

Dr Graham testified that research indicated that Vioxx caused up to 160,000 heart attacks and strokes and was responsible for an additional 27,785 deaths from heart ailments from 1999 to 2003.

Years later, nothing has changed as far as Merck getting honest about the known dangers associated with Vioxx. A study in the September 2006 Journal of American Medical Association found that heart problems could develop in Vioxx users much sooner than the 18 months that Merck claimed and, in fact, could develop in one month.

Still another study in the same JAMA issue found Vioxx to be associated with an increased risk in erratic heartbeats, or arrhythmia, and renal events including swelling of the hands and feet, high blood pressure and kidney dysfunction.

According to the company’s SEC filings, as of March 31, 2007, Merck had been served, or was aware that it had been named as a defendant, in approximately 27,250 lawsuits, which include about 45,700 plaintiff groups alleging personal injuries and approximately 266 putative class actions alleging personal injuries and/or economic loss.

Of these cases, approximately 8,400, representing about 23,450 plaintiff groups, are slated to be in the federal MDL and approximately 16,550 lawsuits representing about 16,550 plaintiff groups in a coordinated proceeding in New Jersey Superior Court.

In addition, the filing notes, approximately 13,700 claimants had entered into Tolling Agreements with Merck, which halt the running of statutes of limitations for claimants who seek to toll claims alleging injuries resulting from a thrombotic cardiovascular event that results in a myocardial infarction or ischemic stroke.

The filing also reports that individual and putative class actions have been filed in state and federal courts alleging personal injury and/or economic loss. A number of these actions, it says, are coordinated in a separate proceeding in an MDL in the US District Court for the Eastern District of Louisiana, and in coordinated proceedings in state courts in New Jersey, California and Texas; and in the counties of Philadelphia, Pennsylvania, Washoe County, Nevada and Clark County, Nevada.

Legal experts agree that the greatest threat to Merck comes from class-action lawsuits seeking recovery under consumer fraud statutes with claims that Merck failed to disclose damaging information to the public and, as a result, received a higher price for Vioxx than it would have if the information had been disclosed.

Legal experts say the most worrisome is a class-action filed in October 2003, now pending before the New Jersey Supreme Court. In the case of International Union of Operating Engineers Local 68 Welfare Fund vs Merck, New Jersey State Superior Court Judge Carol Higbee held that New Jersey’s consumer fraud statute applies to all Vioxx sales in the US and granted class-action status to third-party payors nationwide in July 2005.

Most purchases for Vioxx were made by health plans run by insurance companies and health maintenance organizations, and the Union case could include millions of Vioxx users. Considering that an estimated 20 million consumers used Vioxx in the US since it came on the market in 1999, legal experts says, Merck could get hit with a judgment worth billions of dollars if it loses this one case.

The plans say they lost significant amounts of money after being persuaded by Merck’s marketing efforts to add Vioxx to their formularies, or the lists of drugs for which they agree to reimburse members. The Union alleges that Merck’s marketing and advertising of the drug was fraudulent and misrepresented the safety and efficacy of the drug.

Third-party payors in this case can recover the actual payments made for Vioxx, and they are entitled to treble damages, as well as attorney fees, under New Jersey consumer fraud laws. For instance, if there were 10 million Vioxx users who each bought $1,000 worth of the drug through the benefit plans at the going price at the time of $72 for a 30-day supply, a judgment could conceivably reach $10 billion, in addition to attorney fees.

Unlike personal injury cases, attorneys for the Union do not have to prove that anyone was injured, all they have to show is that the third-party payors were influenced to purchase Vioxx by Merck’s deceptive marketing and promotion of the drug.

In allowing the lawsuit to go forward, Judge Higbee drew no distinction between a company defrauding a person or a third-party payor. “This Court,” she wrote, “sees no reason why the duty to be honest about the safety and usefulness of a drug when marketing it as a product for sale should not extend to the third-party payors who actually pay for the purchase of drugs for members.”

Merck appealed Judge Higbee’s class certification, and in a unanimous decision in March 2006, the New Jersey appellate court affirmed the certification. From there, Merck appealed the appellate ruling to the New Jersey Supreme Court.

On March 19, 2007, a five-judge panel heard arguments, and the Union’s lead attorney, Christopher Seeger, told the court that, because Merck concealed the risks of Vioxx from the health care plans, the drug was chosen over about 30 other cheaper products.

Mr Seeger said, New Jersey consumer fraud statutes should govern the case because all of the decisions about what information was disclosed about Vioxx and how the drug should be promoted and advertised to the public were made at Merck’s New Jersey headquarters.

“It’s perfect for a class action,” Mr Seeger said. “If we really want to deter bad conduct, as is alleged in this case, the way to do it is to protect every purchaser of the product.”

Legal analysts say a ruling by the high court is not expected for several months.

Another class-action got the go-ahead in Canada on November 9, 2006, when Quebec Superior Court Judge Andre Denis authorized a lawsuit by Quebec residents who suffered “damages caused by the use of the medication,” between October 1999 and September 2004, according to the November 11, 2006 Moose Jaw Times Herald.

Dimitri Lascaris, an attorney for plaintiffs in Quebec and Ontario, said there have been more than 20 requests for class-action Vioxx lawsuits filed in Canada but this is the first case that has received clearance to proceed.

April 2007 Big Pharma Litigation Update – Drugs – Part I

Evelyn Pringle April 5, 2007

For the last two decades, illegal drug marketing schemes have paid off well for Big Pharma. However, as the old saying goes, all good things must come to an end, and every major drug company is currently involved in massive litigation.

Some companies are facing thousands of lawsuits with a common complaint that the drug maker deliberately concealed the side effects of their products while illegally promoting the drugs for off-label use.

Off-label refers to prescribing drugs to treat conditions other than those approved by the FDA and listed on the label. It can include prescribing drugs to unapproved populations, such as children or the elderly, or in higher doses than specified on the label.

It is illegal for drug companies to promote a drug for off-label uses, but doctors are allowed to prescribe a drug for any use they choose. Almost without exception, the lawsuits currently pending accuse the pharmaceutical companies of influencing doctors to prescribe the product for unapproved uses.

On August 18, 2006, Bloomberg News reported that Wyeth has accumulated more than 175,000 lawsuits since the Fen-Phen diet combination was removed from the market after studies revealed that the drugs caused heart valve damage, and primary pulmonary hypertension, or PPH, a life-threatening lung disorder. All total, Wyeth has set aside more than $21 billion to cover legal costs and settlements since the drugs were withdrawn, according to Reuters on May 24, 2006.

There was a national class-action settlement involving claims for heart valve damage, but it did not include claims for PPH which are proving to be costly. In one 2004 case alone, a Texas jury awarded over $1 billion to the family of a woman who died of PPH after taking Fen-Phen for about two years, including $113.4 million in compensatory damages and $900 million in punitive damages, according to Wyeth’s 2005 Annual Report. The case was later settled for an undisclosed amount.

PPH is a life-threatening condition that can require a heart-lung transplant. According to the FDA, PPH “results in death in about 40% of affected individuals within 4 years.”

The Fen-Phen combination was never FDA approved for any use, which means every prescription was off-label. Patients were able to get Fen-Phen on the internet, and Jenny Craig and Nutri-System set up weight-loss programs where doctors would prescribe the drugs to customers.

And there appears to be no end in sight for Fen-Phen lawsuits. On December 5, 2006, five more women who took the drugs in 1996 and 1997, filed lawsuits against Wyeth after being diagnosed with PPH. When it comes to liability, a plaintiff’s attorney, Paul Rheingold, in “Fen-Phen and Redux: A Tale of Two Drugs,” says, “there is blame enough to go around.”

The doctors who set up store-front Fen-Phen clinics and prescribed the drugs are obvious culprits, he says, and so are drug companies that profited financially from the fad and may have neglected to pass on information about deadly side effects.

On August 18, 2006, Bloomberg reported that Wyeth was facing 5,000 lawsuits over the menopause drug, Prempro, alleging that Wyeth misled the plaintiffs through deceptive marketing about the cancer risks associated with estrogen and progestin. As many as 6 million women took Prempro before it was linked to cancer in a 2002 study.

Financial analysts are predicting that, Merck in the end, will pay out as much as $50 billion for Vioxx litigation. On March 12, 2007, Reuters reported that a New Jersey jury found the drug was responsible for a plaintiff’s heart attack and awarded $20 million in damages.

According to Reuters, the jury also found that Merck committed consumer fraud by making misrepresentations concerning the heart risks, and intentionally concealing safety information from doctors prior to the plaintiff’s heart attack.

A large number of lawsuits have also been filed against Merck, over the osteoporosis drug Fosamax, and against Johnson and Johnson, over the Ortho-Evra birth control patch. The plaintiff’s allege that Fosamax causes jaw-bone death (OJN) and that the patch causes blood clots, which in turn lead to strokes.

Legal experts predict causation in cases involving Fosamax and the Ortho patch will be easy to prove because the plaintiffs have what is referred to as a “signature disease,” meaning a condition easily tied to the drug because it is rare.

The jaw-bone death occurring in people taking Fosamax is extremely uncommon. Kenneth Hargreaves of the University of Texas, noted the increasing cases in the April 3, 2006 LA Times. “We’ve uncovered about 1,000 patients in the past six to nine months alone,” he said, “so the magnitude of the problem is just starting to be recognized.”

FDA approved in 1995, Fosamax is a relatively new drug, and unreported cases may be higher than expected because doctors may attribute the pain caused by ONJ to osteoporosis, according to Diane Wysowski of the FDA’s Office of Drug Safety.

Dr Salvatore Ruggiero, an oral surgeon and one of the first doctors to notice the rise in ONJ in 2001, told the Times, “Even though the chances of getting this are small, considering there are 23 million women taking this drug, we could be talking about a significant number of people.”

The same goes for the Ortho patch. Blood clots seldom develop in young women of childbearing age. And legal experts say, for that reason, many Ortho patch lawsuits have already ended in confidential settlements with hardly a peep in the mainstream press, and J&J has made it clear to other plaintiffs’ attorneys that the company is willing to cut a deal.

Experts predict that many more lawsuits will be filed because there are thousands of young patch victims who are still unaware that the patch caused the health problems. In 2005 alone, more than 9.4 million prescriptions were written for the Ortho patch, according to IMS Health, an industry-tracking firm.

The FDA says it has received about 9,000 reports of adverse events related to the patch, but the agency also acknowledges that only between 1% and 10% of adverse events are ever get reported.

There are over a hundred more lawsuits filed against J&J involving the Duragesic pain patch. The device is supposed to deliver controlled doses of fentanyl, a drug so powerful that high doses can turn off the respiratory center in the brain.

On July 8, 2006, the Associated Press reported that a Houston jury had awarded $772,500 to the daughter of a woman who died after a leak on the patch increased the dose of the painkiller, and the jury found J&J negligent in the way the patch was made.

Another fentanyl product that legal experts say will bring a wave of lawsuits in the next couple of years, is Cephalon’s painkilling lollipop, Actiq. The product was only approved to treat cancer patients in chronic pain who are already on an opioid drug, because life-threatening conditions can occur at any dose in patients without a built-up tolerance for opioids. But a recent study by Prime Therapeutics found Actiq is being prescribed off-label nearly 90% of the time.

Fentanyl is reportedly 80 times stronger than morphine, and is a Schedule II narcotic drug, in the same category as cocaine, opium, methamphetamine and methadone, a class known to have the highest potential for abuse and overdose.

In 2004, there were an estimated 8,000 emergency-room visits for fentanyl overdoses, according the US Substance Abuse and Mental Health Services Administration. Overdose can result in sudden death through respiratory arrest, cardiac arrest, severe respiratory depression, cardiovascular collapse or severe anaphylactic reaction, according to the agency. As of November 16, 2006, there were 653 deaths confirmed in the US since 2005.

In November 2006, the Wall Street Journal, said evidence obtained in litigation showed Cephalon had set high sales quotas for its sales representatives that could not be reached without promoting Actiq off-label.

Internal company documents show sales reps were regularly sent to doctors who treated no cancer patients, with free coupons for doctors to pass out to patients. According to the Journal, Dr Stephen Leighton, a general practitioner with only 3 cancer patients at any given time, said a Cephalon saleswoman stop by once a month and gave him about 60 to 70 coupons to pass out to patients for 6 Actiq lollipops.

He told the Journal that the coupons led him to try the drug for migraines and back pain and said he prescribes Actiq 15 to 20 times a month to patients who do not have cancer.

According to the November 3, 2006, report in the Journal, Actiq sales increased from $15 million in 2000, to more than $400 million today.

The consequences of the off-label prescribing of this product are far reaching. On January 22, 2006, the Free Press reported that the wife of a minister, a former schoolteacher and mother of three, was charged with involuntary manslaughter because she gave Actiq to a friend for a migraine, and the friend died of a drug overdose.

More lawsuits are sure to be filed against Eli Lilly since secret internal documents obtained in litigation by attorney, Jim Gottstein, from Dr David Egilman, an expert in previous Zyprexa litigation, prove that the company concealed Zyprexa’s link to severe weight gain, high blood sugar, and diabetes for a decade, while Lilly promoted the drug for so many off-label uses that more than 20 million people have taken Zyprexa.

To date, Eli Lilly has spent well over $1 billion to settle about 26,000 Zyprexa lawsuits, with still more litigants waiting in line. Zyprexa has been linked to serious side effects, including diabetes, hyperglycemia and pancreatitis.

On January 14, 2005, a class-action lawsuit was filed in Canada with claims that Lilly also withheld information on the safety of Prozac. The plaintiffs allege that the reason Lilly failed to disclose the documents was because they showed a drastic increase in suicide attempts and other violent acts in patients taking Prozac, when compared to patients taking 4 other drugs.

All through the 1990s, Lilly swore that Prozac did not increase the risk of suicide or violence, while the company was quietly settling lawsuits out of court which made it possible to keep the incriminating evidence hidden with court orders, just as it has been doing with Zyprexa until the secret documents showed up in the press in December 2006.

Similar lawsuits are being filed against AstraZeneca over its antipsychotic drug, Seroquel, which reportedly has been used by more than 16 million people since it came on the market in 1997. The plaintiffs in those cases also claim that Astra downplayed the diabetes risks and concealed safety information.

Experts Alarmed by Rising Cases of Fosamax Jaw Bone Death

Evelyn Pringle October 25, 2006

Dentists and oral surgeons are becoming increasingly worried about the rising number of patients they are seeing with osteonecrosis (ONJ).

ONJ is a painful, disfiguring, debilitating condition that essentially rots the jawbone, as a result of millions of Americans taking the relatively new class of osteoporosis medications.

The drugs belong to a class of medications known as bisphosphonates, and the most popular by far is Merck’s Fosamax, which has been on the market for about a decade.

Fosamax is Merck’s second best selling drug, with revenue last year of $3.2 billion. According to the market research firm, Verispan, 4.2 million prescriptions were written for Fosamax in 2005.

Other drug makers market lesser known bisphosphonates, Procter & Gamble together with Sanofi-Aventis, markets Actonel, which gained FDA approval in 2000, and GlaxoSmithKline and Roche market Boniva which became available last year.

A small number of patients also receive intravenous versions of the bisphosphonates, Zometa and Aredia, as part of cancer treatment.

Critics say the drastic increase in the sale of these drugs over the past several years, to mostly women who are too young to even need them, is due to massive advertising campaigns aimed at consumers in their 40s and early 50s, with the intent that the newly recruited customers will take the drugs for life.

According to the market research firm, TNS Media Intelligence, in 2005 the drug makers combined spent more than $174 million advertising bisphosphonates, up from $54.8 million in 2003, before Boniva was added to the mix.

In treating osteoporosis, according to the August 3, 2006 Dallas Morning News:

“Bisphosphonates work by targeting the cells that constantly remodel internal bone structure. The engines of this turnover are cells called osteoclasts that clear away old bone, and cells called osteoblasts that form new bone in its place. Bisphosphonates slow the work of osteoclasts, but by doing so, also affect osteoblasts because the two work in tandem.”

About 5 years ago, dental professionals first began suspecting a link between bisphosphonates and ONJ, and in 2004, the FDA acknowledged that it had received reports of the condition, mainly in cancer patients receiving the drugs intravenously and recommended that the professional product labeling for the drugs be revised to warn of the possibility of ONJ, but the changes to the labeling were not made until 2005.

Earlier this year, the American Association of Endodontists advised dental surgeons to consider patients on bisphosphonates to be at risk for ONJ.

Fosamax ONJ lawsuitBecause many patients have now been on the drugs for several years, and because more and more prescriptions are being written for the drugs each year, experts say a high number of cases of patients with ONJ are expected to surface over the next few years.

And even though the warnings about the risk of ONJ are now being publicized, the problem for people who have been taking the drugs for years is that even if they quit, bisphosphonates remain in the bones indefinitely.

In addition to causing unbearable pain that often cannot be relieved with ordinary painkillers, ONJ can lead to the loosening of teeth and loss of dental implants, and a host of other problems such as difficulty eating, infections of the face and neck, halitosis, and headaches.

Experts are uncertain why the use of these drugs leads to ONJ. On June 15, 2006, Dr Brian Alpert, a maxillofacial surgeon at the University of Louisville School of Dentistry, told the Louisville Courier-Journal that the bisphosphonate may shut down the production of the osteoclasts, making it difficult for the bone to respond and recover if an infection sets in. In the mouth, where bacteria can actually reach the bone, he says, the drug makes it impossible to fight that bacteria.

A February 2006, study in the Journal of Obstetrics & Gynecology and Reproductive Biology, found that Fosamax caused significant DNA damage in white blood cells in 32 postmenopausal women over a 12-month period. White blood cells are key components of the body’s immune system so critics say that even the possibility of such an effect is troubling.

Whatever the cause, experts warn that there is no cure and that the cases of ONJ are on the rise. Dr Alpert told the Courier-Journal that in 36 years of practice he has seen fewer than 5 cases but that he has now seen seven cases in the course of one year.

“What we have seen and heard from health-care givers is that more and more people are showing up with milder forms, so the true incidence rate now is anybody’s guess,” Dr John Kalmar, an Ohio State University oral pathologist and author of a May 2006 review article in Annals of Internal Medicine, told the Philadelphia Inquirer on June 26, 2006.

Studies have also shown that over time, Fosamax may not accomplish its intended goal of preventing fractures, because experts are finding that the drug may indeed increase bone density but the bones of patients on Fosamax are more brittle and thus more likely to fracture.

In April 2006 the first Fosamax class action lawsuit against Merck was filed in Florida, claiming not only that the company knew about the ONJ risk but also that it refused to study the matter further and ignored requests by the FDA in 2004 to warn consumers about the condition.

According to the October 6, 2006 Chicago Tribune, some 15 class action lawsuits against Merck have been filed in the US. “This is a once-in-a-decade case,” Pensacola, Florida, attorney Tim O’Brien, who specializes in pharma litigation and filed the first class action, told the Tribune.

“This is so rare,” he says, “that you can actually trace back the injury to the cause of the injury.”

“It’s a signature injury,” he told the Tribune.

In one of the latest public warnings, on October 11, 2006, the Pennsylvania Dental Association issued a press release to inform the public about ONJ and said that over “a thousand cases of ONJ had been reported in patients undergoing bisphosphonate treatment.”

The press release referred to one of the largest reports on bisphosphonate-associated ONJ, in an article by Dr Salvatore Ruggiero, chief of the Division of Oral and Maxillofacial Surgery at the Long Island Jewish Medical Center.

“The patients represented in this series of case reports,” the group wrote, “were preponderantly female and typically presented with bone pain, nonhealing extraction sockets or exposed bone.”

“Most cases of osteonecrosis of the jaw associated with bisphosphonates have been diagnosed after dental procedures such as tooth extraction,” the press release said, “however, the condition also can occur spontaneously,” it warned.

“Because invasive dental procedures, such as gum surgery, extractions, or other surgery that affects the bone, can worsen bisphosphonate-associated oral conditions,” the Dental Association advised, “anyone that has taken bisphosphonates should advise his or her dentist.”

“It is especially vital that patients report any symptoms or oral changes to their physician or dentist,” said Dr Sean Boynes, a PDA member and assistant professor at the University of Pittsburgh School of Dental Medicine.

“In addition,” he added, “patients who have begun bisphosphonate therapy should have consistently scheduled dental hygiene appointments.”

“The regularity of these evaluations is usually at the judgment of the treating physician or dentist,” he wrote, “but could occur as often as every 3 months.”

After being diagnosed with and researching ONJ, Dr Beverly Hurwitz, a Salt Lake City doctor who treats chronic pain, told the Salt Lake Tribune on June 26, 2006, that she sent out about 50 warning letters to dentists and oral surgeons in Utah. But as she only received a few replies, she says she is worried that dentists and the public are still uninformed about the condition.

“I know there are millions of women who are on these drugs who need a root canal or other work,” Dr Hurwitz told the Tribune. “There are probably thousands of people who have this and haven’t been diagnosed.”

“People say this is a rare condition,” she states, “but it’s only rare because it hasn’t been identified.”

Dr Patrick Brain, an oral surgeon in Sandy, Utah, says more dentists and oral surgeons are becoming educated about the link between Fosamax and ONJ. “It’s a big problem, and it’s becoming more pervasive,” he told the Tribune.

In the end, neither the warnings nor the lawsuits have slowed the sales of Fosamax. According to Merck’s latest SEC filing, global sales for Fosamax were $771 million for the third quarter of 2006, representing a decrease of only 1% compared to third quarter 2005, and US sales for the quarter increased 7%. Overall, the company reported global sales for the first nine months of $2.3 billion, and Fosamax products remain the most prescribed drugs worldwide, Merck says, for the treatment of postmenopausal, male and glucocorticoid-induced osteoporosis.

Cases of Fosamax Jaw Bone Damage Continue To Rise

Evelyn Pringle October 12, 2006

An article in the October 2006, “Current Opinions in Orthopaedics,” by Dr Catherine Van Poznak, assistant professor of internal medicine at the University of Michigan Medical School, reports that 10% of cancer patients taking Fosamax, or other drugs known as bisphosphonates, have developed osteonecrosis of the jaw (ONJ).

An April 4, 2006 United Press International poll found that more than 2,400 patients who were taking the injected form of bisphosphonate had suffered bone damage to their jaws since 2001. Other bisphosphonates include Aredia, Zometa, Actonel and Bondronat.

ONJ, also called jawbone death, is a disfiguring, debilitating and non-reversible condition marked by exposed and deteriorating jawbone. The disease kills tissue within the jawbone causing pain, swelling, loose teeth, and inflammation. The condition may take years to develop and usually becomes known following a dental extraction, implant or other procedure when the wound does not heal properly.

Fosamax is the world’s top selling bisphosphonate, and is prescribed to prevent osteoporosis, but experts now say that the ONJ side effect directly contradicts its intended purpose.

In the name of profits, critics say Fosamax was over promoted by the pharmaceutical giant Merck, as a life-long treatment for osteoporosis with individuals, especially women, too young to be at risk of developing bone problems.

“The pharmaceutical industry has every desire that a patient who starts on a bisphosphonate would take it for life,” said Dr Robert Gagel, of the Anderson Cancer Center in Houston, to Gina Kolata of the New York Times. “The bone community, of which I am a member,” he noted, “has always been a bit suspicious of that viewpoint.”

The injuries showing up now, critics say, are the result the massive marketing of a class of drug to relatively young persons, who in the majority of cases, did not need them to begin with.

In addition to the tens of millions of dollars spent on public advertising campaigns, Merck relied heavily on industry backed front groups to promote Fosamax and the National Osteoporosis Foundation (NOF), proved most helpful in first promoting the disease in younger women, followed by the promotion of the “cure.”

Merck is a major donor to this organization and is listed in its Annual Report, albeit minus the amount of money that the company donates each and every year.

NOF serves as a major funnel when it comes to promotional campaigns. In 2004 alone, the group’s Annual Report listed revenues of more than $6 million.

The NOF’s web site promotes Fosamax but does not warn about ONJ. Consumer who look to these types of organizations for unbiased information about pharmaceutical products are unaware of their financial support from the drug companies that manufacture the drugs they promote.

Critics say that needs to change now that front groups are playing a much larger role in the drug approval process. For instance, when a drug is up for review before the FDA’s Drug Safety and Risk Management Advisory Committee, members of these groups sign up to testify to praise the safety and efficacy of a drug without disclosing their financial support from the sponsoring drug company.

Wake Forest University health sciences researcher, Dr Curt Furberg, sat on the FDA Advisory Committee for 2 terms and says he frequently heard testimony from members of these groups.

Unlike other speakers, he told the Washington Post on February 7, 2006, spokesmen for the groups do not identify their potential conflicts of interest at the Committee meetings and often sound like they represent drug companies.

Typically, he told the Post, the groups will present a patient to testify about how a drug with emerging safety problems changed his life for the better.

“I don’t doubt that,” Dr Furberg said. “But it is interesting that there was no widow at the hearing who says, ‘My husband took these drugs and he had a heart attack and died and it changed my life.’

“It’s not balanced,” he says. “My sense it that one point of view is missing – the bad news.”

Merck’s marketing tactics for Fosamax have been extremely successful. The company recorded sales of $3.2 billion from Fosamax in 2005, when more 22 million prescriptions were written in the US alone, according to the pharmaceutical tracking firm IMS Health.

These high sales figures peaked during the same year that the FDA asked Merck to warn patients about the risk of developing ONJ.

But the warnings apparently had little impact. On May 15, 2006, Business Week Online, reported that the “global osteoporosis market is at $6 billion in annual sales today, and with a rapidly graying population, it’s growing 25% a year.”

There is no treatment for ONJ and therefore, according to Dr Van Poznak, the focus of medical professionals must be on preventing the condition or alleviating the symptoms.

“We don’t know how to predict who will develop ONJ or who is most at risk,” she said.

Critics say Merck knew about ONJ and failed to warn medical professionals and consumers for years. “Merck became aware of this problem in early 2001 when the first reports starting coming in,” says Attorney Cory Rosenbaum, a partner in the Rosenbaum Faria law firm.

“They waited until September 2004 to issue a warning to health care professionals, and they didn’t post any warnings on their labels until 2005,” he said in a September 24, 2006 press release.

Dr Gregory Lutcavage, an oral and facial reconstructive surgeon with Eastern Carolina Oral and Maxillofacial Surgery Associates, told the Goldsboro News Argus on July 24, 2006, that the warning process has been very frustrating, especially witnessing patients suffering and drug companies delaying going public about the risks and ramification.

“One drug company did not come out with the update to their circular until about three or four months ago,” he said. “We were seeing this three years ago.

“I said to my partners several years ago,” Dr Lucavage told News Argus, “this is a class action suit waiting to happen.”

And the inevitable event he mentioned is indeed happening. One of several class action lawsuits was filed in Florida in April 2006, accusing Merck of failing to warn medial professionals and patients about the risk of ONJ associated with Fosamax.

“We’re getting people calling every day,” Attorney, Gary Wilson, in Minneapolis told the LA Times on July 11, 2006. Mr Wilson said his firm will probably file about 20 cases in the coming months.

Florida attorney, Timothy O’Brien, told the Times that he has filed 30 Fosamax lawsuits and expects to file at least 300 more over the next few months involving Fosamax and Actonel.

The lawsuits claim that Merck aggressively marketed Fosamax as safe and effective, despite knowing about the drug’s potential to cause a disease in which a patient’s jawbone rots and dies.

Although experts agree that there is no cure for ONJ, for the purpose of prevention, the American Dental Association recommends that patients be sure to inform their dentist if they are taking a bisphosphonate before any dental work is performed.

In a warning to professionals, the American Association of Endodontists, a group representative of dental care providers who specialize in root canal surgery, issued a position statement in March 2006 that said, “until further information becomes available, the AAE recommends that all patients taking bisphosphonates be considered at some risk.”

“While bisphosphonates support the buildup of bone in areas weakened by disease,” the AAE told its members, “as a side effect of treatment, patients may experience the opposite in their lower and upper jawbones.”

Fosamax is a relatively new drug, FDA approved in 1995, so the long-term risk of ONJ is unknown, experts say. Unreported cases may be higher than expected, according to Diane Wysowski of the FDA’s Office of Drug Safety, because doctors may attribute the pain caused by ONJ to osteoporosis.

Kenneth Hargreaves, chair of the endodontics department at the University of Texas, noted the rapidly increasing cases in the April 3, 2006 LA Times. “We’ve uncovered about 1,000 patients in the past six to nine months alone,” he said, “so the magnitude of the problem is just starting to be recognized.”

However, because only between 1% and 10% of adverse events are ever reported to the FDA, experts say the number of cases of ONJ is bound to be much higher.

Dr Salvatore Ruggiero, an oral surgeon at Long Island Jewish Medical Center, was one of the first medical professionals to notice the rise in ONJ patients in 2001. “We never saw this before in the jaw” except in patients who had received radiation therapy to that part of the face, Dr Ruggiero told USA Today on May 13, 2005. “It just never existed.”

On April 14, 2006, he told the Wall Street Journal that of the 155 cases of ONJ that he has come across, 22 involve patients who were taking Fosamax and other oral bisphosphonates and some of the patients took Fosamax for seven or eight years. “With the oral drugs like Fosamax, exposure time is the key,” Dr Ruggiero told the WSJ.

He is concerned about the millions of women taking bisphosphonates to treat osteoporosis long term. “Risks increase,” he explained, “the longer you’re on the drugs, and it can take years for the complication to manifest itself.”

“Even though the chances of getting this are small,” he told the Times on April 3, 2006, “considering there are 23 million women taking this drug, we could be talking about a significant number of people.”

Experts agree that stopping the use of Fosamax will not necessarily be helpful for persons who have already been on the drug for several years because the build-up of Fosamax in the body is cumulative and the drug can remain in the bones indefinitely.

There are signs that medical professionals are becoming more aware of ONJ. A study quoted in the September 14, 2006, Star Ledger, by health care marketing research group, Manhattan Research, found that in the first half of 2006, an increasing number of doctors were visiting brand name drug web sites seeking information about dosages and side effects of drugs, and the top 10 sites visited included Fosamax.

Experts recommend that anyone who has been on Fosamax for three or more years should get a thorough examination of the jaw from an oral surgeon before having any extractions or implant work done.

Merck Insurance Carriers Jump Ship Over Vioxx Disaster

Evelyn Pringle September 15, 2006

According to Merck’s August 7, 2006, SEC filing, “At this time, the Company believes that its insurance coverage with respect to the Vioxx Lawsuits will not be adequate to cover its defense costs and any losses.”

In addition, Merck says it has not established any reserves for potential liability relating to the Vioxx lawsuits or investigations, including for those cases in which a verdict has been entered against the company, and are now in post-verdict proceedings or on appeal.

According to the filing, Merck has product liability insurance for claims brought in the Vioxx Product Liability Lawsuits with upper limits of about $630 million after deductibles and co-insurance. This insurance provides coverage for legal defense costs and potential damage amounts that have been or will be incurred in connection with the Vioxx Product Liability Lawsuits.

The company says it has Directors and Officers insurance coverage applicable to the Vioxx Securities Lawsuits and Vioxx Derivative Lawsuits with stated upper limits of about $190 million and fiduciary and other insurance for the Vioxx ERISA Lawsuits with stated upper limits of approximately $275 million.

However, the filing states, the amounts actually recovered under the policies may be less than the amounts specified. It seem there are now disputes with certain insurers about the availability of some or all of this coverage and there are likely to be more disputes, according to Merck.

In fact, the company’s upper level excess insurers, which provide excess insurance potentially applicable to all Vioxx lawsuits, have commenced an arbitration seeking to cancel those policies, to void all obligations under those policies, and to raise other coverage issues with respect to Vioxx lawsuits.

But not to worry. “Merck intends to contest vigorously the insurers’ claims and will attempt to enforce its rights under applicable insurance policies,” the filings says.

For its part, as of December 31, 2004, Merck had established a reserve of $675 million solely for its future legal defense costs related to Vioxx. During 2005, according to the SEC filing, the company spent $285 million in legal defense costs related to Vioxx (i) Product Liability Lawsuits, (ii) Shareholder Lawsuits, (iii) Foreign Lawsuits, and (iv) Investigations.

In the fourth quarter of 2005, Merck recorded a charge of $295 million to increase the reserve for Vioxx legal defense costs to $685 million at December 31, 2005.

“Unfavorable outcomes in the Vioxx Litigation,” the SEC filing concludes, “could have a material adverse effect on the Company’s financial position, liquidity and results of operations.”

Being insurers are fighting against payment of damages before even one case is settled, it does not take a financial genius to figure out that Merck is in for big trouble.

According to the SEC filing, as of June 30, 2006, Merck has been served or is aware that it has been named as a defendant in approximately 14,200 lawsuits, which include approximately 27,100 plaintiff groups, alleging personal injuries resulting from the use of Vioxx.

Of these cases, Merck says, approximately 5,700 lawsuits representing approximately 16,100 plaintiff groups are or are slated to be in the federal Multidistrict Litigation (MDL), and approximately 7,100 lawsuit representing approximately 7,100 plaintiff groups are included in a coordinated proceeding in New Jersey Superior Court before Judge Carol Higbee.

These lawsuits include allegations related to cardiovascular events, thrombotic events, gastrointestinal bleeding or kidney damage.

Merck has also been named as a defendant in close to 200 putative class actions alleging personal injuries or seeking (1) medical monitoring due to class members’ use of Vioxx , (2) disgorgement of profits under unjust enrichment theories, and (3) remedies under state consumer fraud and fair business practice statutes, including recovery for the cost of Vioxx purchased by individuals and third-party payors such as union health plans.

The lawsuits filed in the state courts of New Jersey, California, Texas, and Pennsylvania, have all been transferred to a single judge in each state for coordinated proceedings.

On February 16, 2005, the Judicial Panel on Multidistrict Litigation transferred all Vioxx Product Liability Lawsuits in federal courts nationwide into one MDL for coordinated pre-trial proceedings in the US District Court for the Eastern District of Louisiana before Judge Eldon Fallon.

Judge Fallon has informed the litigants that he intends to try a series of cases through 2006, in the following Vioxx categories: (1) heart attack with short term use; (2) heart attack with long term use; (3) stroke; and (4) cardiovascular injury after April 2002 when the labeling on Vioxx was changed to include the results of the VIGOR trial.

Legal experts say Merck took a major hit on July 29, 2005, when a New Jersey state court certified a nationwide class of third-party payors, such as unions and health insurance plans, who paid for Vioxx used by their plan members. The named plaintiff seeks recovery of purchase costs, plus penalties, based on allegations that the class members paid more for Vioxx than they would have had they known the drug’s alleged risks.

Merck appealed the ruling and on March 31, 2006, the New Jersey Superior Court, Appellate Division, affirmed the class certification. The New Jersey Supreme Court recently decided to exercise its discretion to hear the appeal of the appellate court decision.

The trial in this case is currently scheduled to begin in March 2007, and according to Merck, it is not known whether the Supreme Court’s decision will affect the trial date.

Merck has also been named as a defendant in separate lawsuits brought by the Attorneys General of Alaska, Louisiana, Mississippi, Montana, Texas, and Utah, that claim Merck misrepresented the safety of Vioxx and seek reimbursement for (1) the cost of Vioxx purchased or reimbursed by the state; (2) all sums paid by the state for treatment of persons injured by Vioxx; (3) damages under various common law theories; and (4) remedies under various state statutory theories, including state consumer fraud, fair business practices, or Medicaid fraud, including civil penalties.

Even if the insurance carries end up covering the Vioxx cases, critics say how far is one or two billion dollars worth of insurance tops, going to go when there are states like Texas seeking $168 million in damages and additional civil penalties. Texas Attorney General, Greg Abbott, says he can prove total damages in excess of $250 million including treble reimbursement of $56 million, or $168 million, for five years of Vioxx prescriptions purchased in Texas.

In addition to the product liability lawsuits, Merck and various current and former officers and directors are named defendants in various putative class actions and individual lawsuits filed under the federal securities laws, all of which have been transferred to the US District Court for the District of New Jersey before Judge Stanley Chesler for inclusion in a nationwide shareholder MDL.

The plaintiffs request certification of a class of purchasers of Merck stock between May 21,1999 and October 29, 2004, and allege that the defendants made false and misleading statements regarding Vioxx in violation of the Securities Exchange Act of 1934, and seek unspecified compensatory damages and the costs of lawsuit, including attorneys’ fees.

The complaint also asserts a claim against certain defendants relating to their sale of Merck stock and includes allegations that certain defendants made incomplete and misleading statements in a registration statement and certain prospectuses filed in connection with the Merck Stock Investment Plan, a dividend reinvestment plan.

The Merck defendants have filed a motion to dismiss the complaint which was still pending at the time of the SEC filing on August 7, 2006.

On August 15, 2005, a lawsuit was filed in Oregon state court under Oregon securities law, by the State of Oregon on behalf of the Oregon Public Employee Retirement Fund against Merck and certain current and former officers and directors alleging damages in connection with its purchases of Merck common stock at artificially inflated prices due to Merck’s violations of law related to disclosures about Vioxx .

On July 19, 2006, the Court denied a motion by Merck to dismiss Oregon’s complaint and according to Merck’s SEC filing, the current and former officers and directors have entered into a tolling agreement in exchange for plaintiffs’ dismissal, without prejudice, of the claims against them.

Various federal shareholder derivative actions have been transferred to the Shareholder MDL and consolidated for all purposes by Judge Chesler. The consolidated complaint arises out of the same factual allegations that are made in the other Vioxx securities lawsuits.

The derivative suits assert claims against certain members of the Board past and present, and certain executive officers, for breach of fiduciary duty, waste of corporate assets, unjust enrichment, abuse of control and gross mismanagement.

On May 5, 2006, Judge Chesler granted a motion by defendants to dismiss the complaint and denied plaintiffs’ request for leave to amend their complaint, and plaintiffs have appealed to the US Court of Appeals for the Third Circuit.

On October 29, 2004, according to the SEC filing, two shareholders made a demand on the Board to take legal action against former Chairman, President and CEO, Raymond Gilmartin, and other individuals for causing damage to the company with respect to the improper marketing of Vioxx .

In response to the shareholder’s demand letter, the Board determined at its November 23, 2004 meeting that the Board would take the request under consideration and it remains under consideration.

The Board, the SEC filing states, has recently received another shareholder letter demanding that the Board take legal action against the Board and Merck management for causing damage to the company relating to the company’s improper marketing of Vioxx.

In addition, various federal putative class actions filed against Merck and certain current and former officers and directors have been transferred to the Shareholder MDL and consolidated for all purposes. The consolidated complaint asserts claims on behalf of certain current and former employees who are participants in Merck’s retirement plans for breach of fiduciary duty under the Employee Retirement Income Security Act.

The allegations are similar to those contained in the other securities lawsuits. On October 7, 2005, defendants moved to dismiss the complaint, and on July 11, 2006, Judge Chesler granted in part and denied in part the motion to dismiss.

The court dismissed the claim of breach of fiduciary duty based on continued investment in Merck stock as to all defendants except the 5 individuals who were members of Merck’s Management Pension Investment Committee during the purported class period.

The court dismissed the claim for breach of fiduciary duty based on failure to provide complete or accurate information to participants to the extent it related to specific communications cited in the complaint, but declined to dismiss the claim before discovery to the extent plaintiffs allege that adverse information was withheld from participants.

The court also dismissed the claim for failure to monitor as to all defendants except the members of the Compensation and Benefits Committee of Merck’s Board of Directors who had supervisory responsibility for the MPIC.

Finally, the court declined to dismiss the claim for co-fiduciary liability, absent factual development, but dismissed as duplicative the claim for knowing participation in breach of fiduciary duty.

As far as a slow down in the continuous stream of lawsuits, Merck is no doubt hoping to see a light at the end of the tunnel soon because Vioxx was pulled off the market on September 30, 2004, and some states have a 2-year statute of limitations requiring that lawsuits must be filed within two years after the plaintiffs learned or could have learned of their potential cause of action.

As a result, experts say September 30, 2006 is a deadline for filing Vioxx cases in many states. However, they also note that the laws governing statutes of limitations are complex, can vary from state to state, and might be affected by pending class actions. For instance, some states have 3-year statutes of limitations, and some even longer.

Legal analysts predict there will be arguments raised about the proper application of these statutes, but say ultimately the decisions will be up to the federal and state judges presiding over the individual cases.

But then Merck attorneys know that September definitely will not be the end date for filing Vioxx lawsuits because according to Merck’s SEC filing, as of June 30, 2006, the company has entered into agreements with about 5,800 plaintiffs to toll the statute of limitations, so the September 30, 2006 cut-off date would not apply in those cases.

The tolling agreement with the MDL Plaintiffs’ Steering Committee establishes a procedure to halt the running of the statute of limitations as to certain categories of claims arising from the use of Vioxx by non-New Jersey citizens.

The agreement applies to individuals who have not yet filed lawsuits and only to those claimants alleging injuries resulting from a thrombotic cardiovascular event that results in a myocardial infarction or ischemic stroke. The agreement requires any tolled claims to be filed in federal court.

And although its never mentioned much, Merck has been named as a defendant in litigation relating to Vioxx all over the globe including several countries in Europe as well as Canada, Australia, Brazil, Turkey, and Israel.

In addition, based on media reports and other sources, Merck says, it anticipates that additional Vioxx Product Liability Lawsuits, Vioxx Shareholder Lawsuits and Vioxx Foreign Lawsuits will be filed against it and certain current and former officers and directors in the future.

And that may be true, because critics says there should be another shareholder lawsuit filed against Merck Management this month for flushing another $21 million in profits down the toilet by paying a committee to publish a bogus 1,700 page report to supposedly absolve Merck Management of any wrongdoing.

But in any event, Merck’s legal woes are not limited to civil court proceedings. In November 2004, Merck was advised by the SEC that it was commencing an informal inquiry concerning Vioxx, and on January 28, 2005, Merck announced that it received notice that the SEC issued a formal notice of investigation.

Also, according to the company’s SEC filing, Merck has received subpoenas from the US Department of Justice requesting information related to the research, marketing and selling activities of Vioxx in a federal health care investigation under criminal statutes.

Merck also says it has received a number of Civil Investigative Demands from a group of Attorneys General from 31 states and the District of Columbia who are investigating whether Merck violated state consumer protection laws when marketing Vioxx.

And finally, to end on a happy note, the SEC filing says, investigations are being conducted by local authorities in certain cities in Europe in order to determine whether any criminal charges should be filed related to Vioxx.

“The Company,” Merck states, “cannot predict the outcome of these inquiries; however, they could result in potential civil and/or criminal dispositions.”

Merck Not Losing Sleep Over Vioxx Disaster

Evelyn Pringle June 16, 2006

Merck’s top management team reportedly remains unphased by Vioxx litigation woes. In fact, Prudential Equity Group analyst, Timothy Anderson, says Merck’s Chief Executive, Richard Clark, specifically told him that “Vioxx does not keep him up at night.”

According to Mr Anderson, “the company believes that lower court cases will be overturned on appeal, and it is even considering trying to reintroduce Vioxx.”

“A reintroduction might help Merck’s legal case,” Mr Anderson states, “as long as the FDA or its advisers do not decide that Merck’s risks really do outweigh its benefits,” he said in a June 21, 2006, article in”

Critics say that’s not even a remote possibility because the FDA is still under fire for its own part in the Vioxx disaster and it wouldn’t dare pull a stunt like that.

When it comes to saving Merck in the Vioxx litigation, the FDA is at odds with some of the most powerful leaders in Congress. Senator Charles Grassley (R-Iowa), chairman of the Senate Finance Committee, is on record as saying the Vioxx debacle has shown that the FDA has gotten too cozy with drug companies to conduct proper oversight.

“The Vioxx example showed that the FDA and Merck were too close for comfort,” he said in a speech. “Testimony and documents at our Finance Committee hearing showed that the FDA allowed itself to be manipulated by Merck.”

Documents indeed reveal that the FDA knew about the problems with Vioxx very early on. A memo written by Shari Targum, MD, Project Manager for the Division of Anti-inflammatory Drug Products, clearly shows that as of November 18, 1999, the Data and Safety Monitoring Board of the VIGOR study, a committee independent from Merck, was concerned over the deaths from cardiovascular events in the Vioxx group, compared to the group taking another painkiller.

This memo documents a clear date of recognition by the FDA of when cardiovascular events were brought to the attention of Merck.

Admittedly, if it was up to the Bush administration, the FDA would allow Vioxx back on the market today. Bush does everything in his power to protect the profits of Big Pharma, the industry most responsible for his 8-year rent free lease of the White House.

Under Bush, the FDA has in fact become Big Pharma’s chief enabler when it comes to getting away with murder. A newly released report on June 26, 2006, titled, “Prescription for Harm: The Decline in FDA Enforcement Activity,” says that FDA enforcement actions have declined by 50% since Bush took office.

“The number of warning letters issued by the agency for violations of federal requirements,” the report said, “has fallen by over 50%, from 1,154 in 2000 to 535 in 2005, a 15-year low.”

“During the same period,” it noted, “the number of seizures of mislabeled, defective, and dangerous products has declined by 44%.”

Bush has never hesitated to utilize the FDA in the Big Pharma protection racket. For instance, on January 18, 2006, the FDA issued new regulations for labeling prescription drugs, supposedly aimed at providing doctors and patients with clearer information about their risks. But in the preamble to the regulations, the FDA inserted a claim that lawsuits alleging a failure to warn of known or reasonably knowable risks are preempted by federal law.

Also, amicus briefs filed by FDA attorneys appointed by Bush, on behalf of the drug companies, have tried to claim that because private lawsuits threaten to disrupt the nation’s system of drug regulation, federal standards preempt requirements established by state judges and lawmakers, and that if a state court finds that a drug is unsafe, it is in direct conflict with the conclusion reached by the FDA.

With Bush using the FDA to do the dirty work, Republicans lawmakers up for reelection this fall, don’t have to make a spectacle of themselves fighting for such blatant industry-friendly legislation during an election year.

A partner in the LA based Baum Hedlund law firm, attorney Karen Barth Menzies, has been litigating claims against drug companies for more than a decade and says “the Vioxx public health debacle has served to highlight deep-seeded problems within the FDA.”

“Drug companies are profit-driven,” she explains, “and are loath to issue warnings about risks associated with their drugs, even those that become quite clear.”

“Medicine is no longer about health,” Ms Menzies notes, “its about market share and profits.”

Since Bush took office, the FDA has sent out its legal squad to assert the preemption argument on behalf of drug companies in attempt to defeat private citizens in lawsuits numerous times. However, Ms Menzies’ team of Baum Hedlund attorneys has knocked the FDA briefs out of the ball park in a several cases, including Witczak v Pfizer and Motus v Pfizer.

But “the FDA’s legal arm has continued to intervene in private civil lawsuits on the side of drug companies,” she says, “arguing that FDA’s decisions should not be second-guessed by anyone, the federal preemption argument.”

In the past 15 plus years, Ms Menzies notes, the FDA has been worse than “comatose” as the New York Times recently described the agency. “It has sided with industry and become an adversary against consumers,” she points out.

“And it is precisely for this reason,” she says, “that the public is in such desperate need for an agency that advocates for them, rather than the drug industry.”

In light of recent disasters like Vioxx that have resulted in large part due to a lack of regulatory oversight, Ms Menzies contends that the “FDA’s decisions must be second-guessed for the safety of the public.”

Medical experts agree that the FDA must be second-guessed. “With an FDA that regularly displays incompetence and negligence in its deliberations about the efficacy and safety of medications,” says Dr Grace Jackson, author of, Rethinking Psychiatric Drugs: A Guide to Informed Consent, “it cannot possibly be the case that this federal agency possesses the institutional expertise to which courts or litigants should now defer.”

“Indeed,” she notes, “if the FDA is preempting anything, it is the sound practice of medicine, and the integrity of American health care.”

It will truly be a fatal day for the concept of separation of powers when a federal agency like the FDA can wield the power to enact federal law by filing legal briefs in private lawsuits, funded by tax dollars, to defeat American citizens who are already up against one of the most profitable industries on earth.

Moreover, if FDA attorneys are going waste tax dollars, the least they can to is come up with a few valid arguments. The argument that drug companies are not allowed to warn the public by adding a new warning to a label when dangers become known because it would violate FDA regulations, is ridiculous. There is not now, and there has never been, a law that prevents a drug maker from strengthening a warning or labeling consistent with the company’s specific regulatory ability to do so under 21 CFR 314.70(c)(6)(iii)(A).

The guy responsible for this silly argument is the FDA’s Chief Counsel, Daniel Troy, recruited straight off of Pfizer’s legal team, was Big Pharma’s inside man until he quit the FDA in the fall of 2004.

Instead of going after the drug companies for killing off citizens with lethal drugs in the name of profits, he devoted much of his time filing Joe Tax Payer funded briefs, on behalf of his former industry clients, and even invited drug company attorneys to submit their cases to him for amicus brief consideration.

On March 1, 2004, Jessica Rae Dart, an attorney involved in civil litigation against Pfizer, filed an affidavit in support of a plaintiff’s motion and described a lecture she attended by Mr Troy that clearly shows him offering the FDA’s services to trial lawyers representing drug companies.

On December 15, 2003, Ms Dart said, Daniel Troy, Chief Counsel of the FDA, headed a discussion for pharmaceutical firms and defense attorneys titled, “The Case for Preemption” at the 8th Annual Conference for the In house Counsel and Trial Attorneys, Drug and Medical Device Litigation” in New York City.

During Troy’s “Case for Preemption” talk, she said, Troy stated that he was the initiator behind all the FDA Amicus Briefs and/or Statement of Interest filed on behalf of manufacturers “since the new administration” took over. Specifically, he stated, “I am not the only one who decides,” but “I am the initial proposer.”

According to the affidavit, Troy made it clear that he wanted to file more amicus briefs on behalf of the drug companies and actually invited members of the defense attorney’s audience to approach him with requests for briefs, stating “we can’t afford to get involved in every case,” we have to “pick out shots,” so “make it sound like a Hollywood pitch.”

However, in an obvious effort to try and level the playing field for the little guy, in 2004, Representative, Maurice Hinchey (D-NY), chastised the administration for taking the FDA in a radical new direction, “seeking to protect drug companies instead of the public,” and persuaded the House to cut $500,000 from the budget of the chief counsel’s office as a penalty for the FDA’s aggressive opposition to citizen’s lawsuits.

Although the FDA’s current Chief Counsel, Sheldon Bradshaw, might not have the direct and visible financial links to Big Pharma of his predecessor, critics say, he certainly does not represent a changing-of-the-guard in political leadership at the FDA.

“In fact,” Attorney Menzies says, “following in his predecessor’s footsteps, Bradshaw submitted a legal brief in support of Pfizer’s federal preemption arguments.”

Judges across the nation have flat-out rejected the FDA’s argument. A Minnesota court said it declined “to treat statements from a single FDA legal brief as declarations afforded the preemptive force of law.”

A California court ordered the brief stricken from the record calling it “hearsay and irrelevant,” and an Illinois judge said it “contains nothing more than legal argument by [FDA] counsel.”

Most recently, in a June 6, 2005, Vioxx court hearing, the FDA’s position on preemption hit a major road block with New Jersey State Court Judge, Carol Higbee, who is handling the Vioxx cases, when she labeled the FDA’s Final Rule’s preamble “a political statement by the FDA.” She scoffed at the agency’s preemption claim and said:

“It is contrary to the U.S. Supreme Court’s decisions. It is contrary to all the law on preemption. … In addition to being contrary to the law of the land, it is also contrary to the Constitution of the United States.”

Judge Higbee ended her comments by throwing cold water on any planned attempt by Merck’s legal team to give the preemption argument a whirl, by telling them right-out in open court: “I am not going to allow you to use it.”

Speaking to the Consumer Federation of America in March 2005, Senator Grassley, basically said the FDA can’t be trusted to protect citizens against dangerous drugs like Vioxx because the agency is to “cozy” with companies like Merck.

Based on a clinical trial that took place in 2000, he told the audience, both the FDA and Merck were aware that heart attacks were 5 times more likely in patients taking Vioxx than among those taking a similar drug, but the FDA did nothing to change the labeling on the drug for nearly two years, while Merck aggressively marketed Vioxx on nightly TV.

Describing whistleblowers as “patriots” who risk their careers in the interest of public safety, Senator Grassley recounted the controversy over Vioxx that was fueled in large part by the efforts of FDA scientist, Dr David Graham, to shed light on the drug’s potential risks.

Senator Grassley described how the FDA “disregarded and stonewalled” concerns raised by its own scientist. “Dr. Graham completed a study that found an increased risk of heart attacks and strokes in patients taking Vioxx,” he told the Federation. “His immediate supervisor, however, dismissed this study as ‘scientific rumor.'”

“The very same month that Dr. Graham warned the FDA of the cardiovascular risks of Vioxx,” Senator Grassley continued, “the FDA approved the use of Vioxx for children.”

He told the audience how the director of FDA’s office of new drugs suggested that Dr. Graham water down his Vioxx conclusions and how Dr Graham replied that in good conscience he could not. “When Dr. Graham was asked to present his findings at my committee’s Vioxx hearing,” the Senator said, “he was also undermined.”

News reports that day show that acting FDA Commissioner Lester Crawford called Dr Graham a “maverick who did not follow agency protocols.”

“This statement,” Senator Grassley told the Federation, “made on the eve of the hearing, could logically serve no purpose other than to intimidate Dr. Graham.”

The Vioxx matter became the focus of the Senate Finance Committee, basically because of the drug’s cost to public health care programs, and the Committee is responsible for oversight of the Medicaid and Medicare programs.

During a November 18, 2004, hearing, the ranking Democrat on the finance committee, Senator Max Baucus, discussed the tax dollars wasted on Vioxx: “In the 5 years that Vioxx was on the market, Medicaid spent more than $1 billion on the drug,” he said.

In addition, he complained about the fact that government programs are now paying the medical bills for patients harmed by Vioxx. “Medicaid bears the cost of any additional medical care necessary when drugs cause injury,” Senator Baucus said.

Merck’s last CEO, Raymond Gilmartin, resigned on May 5, 2005, the same day that another Congressional Committee, the House Committee on Government Reform, released more than 20,000 pages of documents showing how Merck continued to promote Vioxx long after it was aware of the safety problems.

Documents released that day at a Reform Committee hearing on Merck’s marketing practices, described in detail how Merck directed its 3,000-strong sales force to avoid discussions about the cardiovascular risks identified in the 2000 VIGOR study. During visits with doctors, sales reps were instructed to rely on a “Cardiovascular Card” that claimed Vioxx was actually protecting the heart rather than damaging it. The sales reps were specifically trained on how to speak, smile, and position themselves most effectively when talking to doctors.

If doctors asked about Vioxx increasing the risk, the sales reps were instructed to give them a pamphlet written by Merck’s marketing department that claimed Vioxx was eight times safer for heart patients than similar pain medications, and omitted Merck’s findings that Vioxx produced a 5-fold increase in the risk of heart attack and stroke compared with naproxen, the other painkiller used in the study.

The company’s training efforts were obviously successful because Vioxx was approved by the FDA in May 1999, and the drug reached $2 billion in sales in two years, faster than any drug in Merck’s history.

In 2000, the same year the VIGOR study was completed, Vioxx was the most heavily advertised drug in the US with $160.8 million spent on mass media promotion. And the blitz paid off well. In one year, retail sales of Vioxx rose from $329.5 million in 1999, to $1.5 billion in 2000, up 360%, according to a November 2001, report by the National Institute for Health Care Management.

For the same year, Pepsi only spent $125 million advertising its products. Vioxx also beat out Budweiser’s spending of $146 million, and matched Dell Computer’s ad expenditures of $160 million. And by far, the drug beat out Nike’s advertising budget of $78.2 million for shoes, and Campbell soup’s $58 million.

The increase in Vioxx sales from 1999 to 2000 accounted for 5.7% of the one-year increase in total prescription drug spending, more than any other single drug, the report said, and Vioxx was the 13th best selling drug in 2000.

In 2003, Merck upped the anti even more and spent 499.8 million on Vioxx promotion including the cost of sales reps detailing office and hospital-based physicians, advertising in medical journals and the retail value of samples passed out to doctors, according to IMS Health, Integrated Promotional Services in April, 2004. In return Vioxx saw growth of 24% and became the 6th best selling drug.

What’s that old saying about the bigger they are the harder they fall?

Nowadays, instead of spending hundreds of millions of dollars promoting Vioxx, shareholders are paying hundreds of millions a year for attorney fees. As of December 31, 2004, in its 2005 annual report, Merck said it had a reserve of $675 million solely for its future legal defense costs related to Vioxx. And in the fourth quarter of 2005, Merck said it recorded another charge of $295 million to increase the reserve.

“This reserve is based on certain assumptions,” the annual report said, “and is the best estimate of the amount that the Company believes, at this time, it can reasonably estimate will be spent through 2007.”

There is no money listed anywhere in Merck’s financial filings set aside to pay damages to any injured party, at least through 2007. The whole wad goes for Vioxx “legal defense costs.”

And to think, Republicans have the nerve to say that personal injury attorneys who go up against attorneys with a war chest of close to $700 million a year are financial gluttons.

However, thanks to a helpful group of plaintiff’s attorneys, going up against Merck in jury trials is getting bit easier. The group put together what they call a pre-made Vioxx trial package, complete with a guide to pursuing a claim against the corporate giant.

The package reportedly organizes and edits all of the information that shows Merck knew about the dangers of Vioxx but failed to inform consumers and includes the most damaging documents and evidence available against the drug maker. The package is offered on a small contingency fee basis and costs nothing until the lawsuit is won.

This month, Merck’s legal eagles were hit up once again when the New England Journal of Medicine issued a correction to a paper it published last year on Vioxx that mistakenly said that heart risks only became apparent after 18 months. The Journal editors deleted the 18 month statements saying a statistical error by Merck undermined the evidence for them.

All through litigation thus far, Merck’s main argument has been that the risk to patients from Vioxx did not begin until after 18 months of use, and with one sweep of the pen, the NEJM blew a hole in that defense.

But then juries are not buying into the 18 month defense in any event. In the first jury trial, in August 2005, the jury held Merck liable for the death of Vioxx victim, Robert Ernst, age 59, who died after only taking Vioxx for eight months.

Internal company documents introduced at the trial showed that Merck was aware of the problems with Vioxx as early as 1997. Attorney, Mark Lanier, showed jurors documents and e-mails to prove that Merck scientists knew about the cardiovascular risks (CVs), two years before the drug was approved.

For instance, one 1997 email written by Merck scientist Dr Alise Reicin, said: “The possibility of increased C.V. events is of great concern.”

“I just can’t wait to be the one to present those results to senior management,” he wrote.

As evidence to prove that physicians were deliberately misled, the jury was shown a 2001 Dear Doctor letter, in which Merck specifically stated that in the largest study ever of more than 4000 patients taking Vioxx, only 0.5%, or about 20 patients, had incurred CVs, when in fact, 14.6% of the patients, or 590, had cardiovascular problems, according to a Merck report submitted to the FDA.

It was also proven at trial that in April 2001, the doctor who prescribed Vioxx to Mr Ernst, had received the letter with the fraudulent statistics.

Mr Lanier played a video for the jury that showed sales reps were told that Vioxx did not increase heart attacks and were trained to view doctors concerns about CVs as “obstacles” to be avoided or dismissed. Another training document told sales reps to play “Dodgeball” if doctors raised questions about CVs.

In a more recent on-going trial, on July 5, 2006, more damaging testimony against Merck was given by Dr Lemuel Moye, a professor of biostatistics at the University of Texas, in a California case filed by a 71-year-old, Stewart Grossberg, who told the jury that Merck’s clinical trials conducted as far back as 1996, showed patients taking Vioxx were at risk for heart attacks and strokes, long before the drug went on the market, and that after reviewing the trials, he concluded that Vioxx carried more risks to patients than benefits.

But legal experts say that back in April 2006, Merck received the worst news possible when it lost an appeal to deny certification of a Vioxx-related class action lawsuit. They says the court’s decision to certify third-party payers, like health insurance companies, HMOs, and unions, has to be the most disturbing development for the company to date.

By ruling against Merck, the court gave the OK to apply New Jersey’s consumer fraud statutes to all members of the class, even to plaintiffs from states that have different laws. Experts predict that the consequences of this ruling will be profound and far-reaching, and the costs to Merck potentially staggering.

In light of the verdict in the April 2006, trial of Cona v Merck and McDarby v Merck, in which the jury said Merck violated New Jersey’s consumer fraud statute because it misled physicians about the cardiovascular risks of Vioxx and concealed information about those risks from doctors, experts say, the appeals court’s ruling might just turn out to be the nail in the coffin for Merck.

Christopher Seeger, the lead lawyer in the class action filed by HMOs, insurers, and unions, says that Judge Higbee, who is overseeing about 5,000 Vioxx cases, should apply the findings of this jury to the class action, which he said could be worth $10 billion.

Mr Seeger told Bloomberg News on April 5, 2006, that this was devastating for Merck: “This jury just said ‘Yes’ to consumer fraud, so I think we go right to damages.”

Mr Seeger is referring to collateral estoppel a situation in which the judgment in one case prevents, or estops, a party from litigating the same issue in future cases. Because of the consumer fraud verdict, Mr Seeger contends that Merck may now be permanently bound by the jury’s ruling.

Indeed, Bloomberg says, a judge could decide that the ruling that Merck failed to warn of Vioxx’s risks could be applied to thousands of future trials in New Jersey, leaving the jury to decide only whether Vioxx caused specific heart attacks.

Barry Turner is an academic lawyer in the UK who has taught medical ethics and for a number of years has been involved in litigation activities related to the pharmaceutical industry.

He has been advocating the use of federal and state false claims statutes against Big Pharma for years. “I take the view that because of the harsh penalties imposed when these actions are successful,” he explains, “that this is the legal strategy that will work against these people.”

“PI suits,” he says, “may very well be morally righteous but they will never make this industry change its ways.”

“What is at issue,” he continues, “is that companies factor litigation costs into ‘research and development’ and other costs of sales, so it does not hurt them to pay out in damages, what they already budgeted for.”

“The Federal and State False Claims Act actions are different,” he notes, “a drug company hit by a big one of these will have to pay out colossal amounts in fines and damages, hundreds of millions in most cases,” he says, “and these come out of profits.”

“Then the stock will go down,” he explains, “and they can be hit again under the Sarbanes Oxley Act.”

“And if anyone thinks that Sarbanes Oxley is feeble legislation,” he says, “they can always ask the Enron executives.”

“As well as defrauding the taxpayer,” Mr Turners notes, “the consequences of these deliberate and deceitful acts hurts shareholders when the litigation causes serious downturns in stock value.”

“This is a violation of Sarbanes Oxley,” he says, “and sooner of later there will be a major action here.”

In each of the cases Merck has lost, the juries have ordered the drug giant to pay large punitive damage awards, creating additional problems for the company. Punitive damages are awarded to punish a defendant and deter future misconduct. They are not covered by insurance because the conduct is an intentional act on the part of the insured; and the intent of punitive damages would be lost if a defendant could avoid payment simply by buying more insurance.

In the state of New Jersey, punitive damages are allowed to be as much as 5 times the amount of compensatory damages. The Texas $229 million punitive damage award against Merck, even when reduced, will still be about $26 million. Legal analysts say no company could avoid financial ruin if ordered to pay tens of thousands of $26 million punitive damage awards.

Punitive damages provide a basis for a derivative lawsuit seeking damages for conduct that compromised the value of the investments of shareholders. These types of lawsuits are being filed for much less than what Merck pulled with Vioxx.

For instance, in March 2005, a class action lawsuit was filed in the US District Court for the District of Massachusetts, on behalf of shareholders in Elan Corp PLC, after the company’s withdrawal of the multiple sclerosis drug Tysabri, with many of the same allegations that can be made against Merck.

The complaint alleges that Elan failed to disclose and misrepresented material adverse facts in connection with Tysabri including serious immune-system side effects and that the information was concealed in order to fast track Tysabri for FDA approval.

In any event, notwithstanding that Merck continues to contend that it will try every single case, legal analysts say, state courts will never be able to handle the trials for the lawsuits already filed, much less the additional cases still being filed on a regular basis.

“At some point courts are going to be clogged with these cases and judges will start to put pressure on Merck and the plaintiffs to settle these cases,” according to John Leubsdorf, professor of law at Rutgers Law School, on CNN Moneyline on April 26, 2006.

“The only scenario in which they won’t settle,” he says, “is if they win so much that all the plaintiffs go away.”

But experts say that is definitely not going to happen.

Merck Legal Team Makes Killing Off losing Vioxx Strategy

Evelyn Pringle June 5, 2006

Not much has changed at Merck since Vioxx was pulled off the market. The only difference for shareholders is that instead of spending hundreds of millions of dollars a year to promote Vioxx, the attorney’s fees are now costing hundreds of millions of dollars a year.

As of December 31, 2004, Merck had established a reserve of $675 million solely for legal defense costs related to Vioxx, according to the company’s 2005 annual report.

During 2005, the report said, Merck spent “$285 million in the aggregate in legal defense costs worldwide” related to Vioxx.

In the fourth quarter of 2005, Merck recorded a charge of $295 million to increase the reserve solely for its future legal defense costs related to Vioxx, the report said, to $685 million as of December 31, 2005.

“This reserve is based on certain assumptions,” Merck told shareholders, “and is the best estimate of the amount that the Company believes, at this time, it can reasonably estimate will be spent through 2007.”

That said, the company has not set aside one dime for potential damage awards in Vioxx trials through 2007. Which means the only good news to report as far as Merck’s legal strategy of a case by case defense of thousands of lawsuits in the years ahead, is that the company’s legal team will keep raking in dough while Merck slowly goes under.

We now know that tens of thousands of people died, and many more were injured, because Merck concealed the information about the adverse effects of Vioxx. But to date, Merck has not paid one red cent in damages. And the appeals process initiated by Merck attorneys, guarantees that that money awarded to any plaintiff so far will be years away. And even then, experts say, the close to $300 million in damages awarded will be reduced to $48 million by caps on punitive damages.

In addition to the thousands of personal injury and wrongful death claims, Merck also faces class actions, filed on behalf of prescription drug plans and insurance carriers seeking treble damages, that experts say could expose Merck to multi-billion dollar verdicts.

The plaintiffs in the class actions allege that Merck misrepresented the safety profile of Vioxx, ignoring clear and early warning signs of its risks in order to continue its sale, and that had they known the truth, they would not have included Vioxx as an approved drug or agreed to reimburse plan members for its high cost. They also contend that Vioxx was no more effective than over-the-counter painkillers already on the market.

In seeking reimbursement, these plaintiffs will not have to prove that Vioxx caused any injuries or deaths. All they will have to show is that Merck continued to push Vioxx after it knew about the drug’s increased risks.

And on top of the class action monsters, there is the pesky little matter of lawsuits filed on behalf of the individual states that also have the potential to expose Merck to billion dollar damage awards. The state actions are similar to the class actions and seek repayment for money paid for Vioxx by state run health care programs like Medicaid.

The damages sought are huge. For instance, Texas Attorney General, Gregg Abbott, is seeking $168 million and says he can prove total damages in excess of $250 million over five years in payments for Vioxx.

According to Merck’s 2005 annual report, “The Company has received a Civil Investigative Demand from a group of the Attorneys General of 31 states and the District of Columbia who are investigating whether the Company violated state consumer protection laws when marketing Vioxx. The Company is cooperating with the Attorneys General in responding to the Civil Investigative Demand.”

The state of New York’s Controller, Alan Hevesi, claims his state’s retirement fund lost $171 million when Merck’s stock value dropped and that teachers, policemen, and firefighters have lost $287 million all total from their retirement funds.

The NY suit alleges that Merck violated federal securities laws by failing to disclose information about the safety risks of Vioxx. “The New York State Common Retirement Fund is exactly the kind of sophisticated and knowledgeable financial institution that the Congress, in the 1995 Private Securities Litigation Reform Act, intended to lead such class action suits,” Mr Hevesi said in a press release.

The NYSCRF is reportedly the second largest public pension fund in the US, in terms of membership and assets, with more than 970,000 retirees, beneficiaries and members and over $120 billion in assets.

“Merck must be held legally responsible for its actions,” Mr Hevesi noted in his press release. “These actions have put lives at risk and cost shareholders billions of dollars.”

Experts say that for Merck’s “no pay” strategy to work, the company would have to win virtually every one of the of individual lawsuits and then hope that such success would help defeat the claims by state health care programs, and the insurance and healthcare plans. Which they say is absolutely impossible because Merck has already admitted that consumers who used Vioxx over 18 months were exposed to an increased risk.

Billion dollar awards could easily drain Merck’s insurance coverage and punitive damages based on evidence that shows the company withheld, manipulated, and misrepresented the results of clinical studies, and therefore willfully marketed Vioxx, are not covered by insurance and must be paid by Merck directly.

According to attorney, Barry Turner, “Merck may be holding its own at the moment but the fact is that the lying and deceit cannot continue indefinitely without some major blow to stockholder funds.”

“I do think that Merck will get burned over this one,” he says, “if their lawyers are dumb enough to fight each personal injury case.”

Even though insurance does not cover punitive damages, Mr Turner says, “personal injury litigation costs are factored into so called R&D and marketing costs and the end user price covers all of this money.”

“But the securities actions are different,” he says. “Anyone who thinks this strategy is going to help the stockholders is crazy,” he warns.

He predicts that Merck will soon start trying to settle PI cases with confidentiality clauses. “This would mean less payouts,” he says, “and less knock on effect as other plaintiffs and their lawyers stand by to watch the action before running their own cases.”

The fact is, that in every new trial, the lawyers for the plaintiffs introduce more embarrassing evidence. For instance, in a California trial that began last week, a former Merck employee, testified that the company did not inform federal authorities about two clinical trials in which users of Vioxx were found to be more likely to die than people given a placebo.

Dr Edward Scolnick, the former head of Merck’s research laboratories, said in a videotaped deposition played for the jury, that he did not believe the numbers were coincidental. “It’s not likely due to chance,” he said.

Dr Scolnick testified that people on Vioxx died at a rate 4 times higher than those who didn’t receive the drug in one trial, and the rate was 2 1/2 times higher in the other. Both studies were done in 2001 to see if Vioxx could help Alzheimer patients.

He said Merck did not turn over results to the FDA when company officials met with an FDA representatives in April of that year and that he was not aware of the trial results at the time.

The juries have also viewed internal documents that show Merck training its sales reps to avoid answering tough questions from doctors about the adverse effects of Vioxx on the heart. In one training manual, each of the last four pages of potential questions that doctors might ask, the manual said “DODGE!” to avoid answering.

In the first trial in Texas, the plaintiff’s attorney, Mark Lanier, presented documents showing that Vioxx sales reps at one time received a $ 2,000 bonus if one of the doctors they met with prescribed Vioxx more than 55% of the time, and that the rep was paid another $2,000 if the rate exceeded 61%.

Mr Lanier also showed the jurors a Merck SEC filing that said Merck’s CEO Gilmartin was making about $3 million in salary and bonuses in 2000, when the company received the results of the clinical study in which Vioxx users suffered 5 times as many heart attacks as those taking naproxen.

In March 2006, Merck lost a major legal battle that had the company’s attorneys kicking and screaming, when US District Judge Eldon Fallon ordered FDA scientist, Dr David Graham to testify in a deposition in response to a subpoena from attorneys for Vioxx plaintiffs.

A major part of Merck’s legal strategy has been to continuously point out that Vioxx had been approved by the FDA. Experts say, Dr Graham’s testimony will throw a monkey-wrench into that strategy because it will reveal the long-fought battles over the deliberate concealment of the safety risks of Vioxx within the FDA itself.

Judge Fallon said the deposition would be limited to material relevant to the up-coming federal trial in July 2006, and Dr Graham’s previous public statements. In the deposition, Dr Graham alleged that Merck dragged its feet about changing the label on Vioxx to warn of the increased risk of heart attacks.

So now in their latest run-up-the-costs tactic, Merck attorneys have filed a motion to limit the use of Dr Graham’s deposition claiming it goes beyond anything Dr Graham previously said and therefore portions of it should not be heard by a jury.

Merck’s memorandum filed with the motion, asks the court to exclude the following: “The two-year period for coming up with the revised label for a problem as serious as high risk of heart attacks with Vioxx, this is an extraordinary long period of time, and the only explanation based on my long experience at FDA is that there was foot dragging by the company.”

But this statement is not new. Dr Graham publicly discussed the failure by Merck and the FDA to warn the public and add a new label to Vioxx while testifying at a congressional hearing a couple years ago on November 18, 2004.

In regard to the death and injuries caused by those failures, he in fact said: “I strongly believe that this should have been, and largely could have been, avoided.”

Maybe Merck would rather have the jury listen to how Dr Graham put the number of people injured by Vioxx into perspective, when he told members of the Senate committee that instead of side-effects from Vioxx, to picture the number of people as if it were airline crashes.

“If there were an average of 150 to 200 people on an aircraft,” he told the panel, “this range of 88,000 to 138,000 would be the rough equivalent of 500 to 900 aircraft dropping from the sky.”

“This translates to 2-4 aircraft every week,” he noted, “week in and week out, for the past 5 years.”

Merck also does not want the jury to hear Dr Graham say that Vioxx should not have been approved to begin with and that after learning the results of the VIGOR study in 2000, that Merck should have done a large study to determine whether Vioxx damaged the heart or blood vessels; and that an FDA official had recommended “at least” a warning label for the drug.

There is nothing new about these allegations either. Dr Graham made basically the same charges when he told the committee that the FDA “views the pharmaceutical industry it is supposed to regulate, as its client, over-values the benefits of the drugs it approves and seriously under-values, disregards and disrespects drug safety.”

Dr Graham also pointed out that even when the FDA did try to take measures to limit harm, the agency lacked the enforcement authority to make companies comply. In the case of Vioxx, he said it took more than 2 years to get Merck to add the increased risk of heart attack and stroke to its label.

In their memorandum, Merck attorneys complained because: “Much of Dr Graham’s testimony is an elaboration of why and how he believes the FDA is ‘broken.'”

“However,” they wrote, “Congress (not the jury) is the only body that can address Dr Graham’s concerns.”

Well then perhaps Merck should call members of congress to testify at future Vioxx trials to explain how Merck got top FDA officials to protect Vioxx profits by concealing the health risks associated with Vioxx that were revealed in damaging studies as far back as 2000.

In a statement following the verdict in first trial, Senator Grassley was quick to point out the FDA’s involvement in the Vioxx disaster. “Those running the nation’s public safety agency repeatedly dismissed the concerns of their own scientists and seemed to do everything possible to keep the public in the dark about emerging problems with Vioxx,” he said.

“The Food and Drug Administration was also negligent in the Vioxx case,” Senator Grassley declared.

A hearing on Merck’s motion is scheduled for July 5, 2006, to decide what parts of Dr Graham’s deposition will be allowed in during the trial of a suit brought by retired FBI agent, Gerald Barnett, who had a heart attack in September 2002.

Sooner rather than later, the steady stream of multi-million dollar judgments is bound to enrage Merck shareholders who have already suffered massive losses in their investments since October of 2004.

When Vioxx was pulled off the market in September 2004, the drug’s $2.5 billion in annual sales equaled 11% of Merck’s revenues. When news of the recall broke, Merck shares plunged $12 to $33, wiping out $28 billion of stock value in one day for investors, pension funds and mutual funds.

Stock value dropped another $2.35 per share, or 7.7%, following the first jury’s verdict for the plaintiff in Texas on August 19, 2005.

Up until then, analysts had estimated Vioxx liability to be as high as $18 billion. But by the following Monday morning after the verdict, analyst, David Moskowitz, from Friedman, Billings, Ramsey & Co, told CNBC that he had raised his forecast for Merck’s total tab from $11 billion to $50 billion.

Critics says, Merck is misleading investors by not making any provision whatsoever for the Vioxx liabilities in financial statements. In its annual report, regarding Vioxx litigation for 2006, Merck said:

“The Company has not established any reserves for any potential liability relating to the VIOXX Litigation. Unfavorable outcomes in the VIOXX Lawsuits or resulting from the VIOXX Investigations could have a material adverse effect on the Company’s financial position, liquidity and results of operations.”

Overall, there appears to be no good news out there for Merck shareholders. According to the January 27, 2006, Business Week Online, research from Morgan Stanley and Danish investment bank, Jyske Bank, estimates that patent expirations this year will equal 25% of Merck’s 2005 sales as major medicines face generic competition.

And in the meantime, more and more angry consumers are saying civil damage awards are not a enough punishment for Merck and that top management people who allowed the Vioxx disaster to happen should be in jail.

Although unbeknownst to most people, criminal charges are being considered that could lead some of the culprits in that direction.

In New Jersey, the $9 million punitive damage award against Merck in April 2006, resulted in the case being referred to the state’s Attorney General. Under the New Jersey Punitive Damage Act, any time there is a punitive damage award there must be an investigation “as to whether a criminal act has been committed by the defendant.”

By now, there’s certainly plenty of evidence in the public domain to prove that criminal acts were committed. For starters, the Attorney General can review the victims revealed in a 2004 study, lead by FDA scientist, Dr Graham, that says Vioxx caused as many as 140,000 heart attacks and strokes and killed as many as 55,000 people.