Vioxx: The Trials Begin

July 20th, 2005 by

The first of what promises to be thousands of lawsuits pertaining to Vioxx is currently underway in Angleton TX, a town of 18,000 people. According to an article in the New York Times (registration required), famed plaintiff attorney W. Mark Lanier has zeroed in on a letter sent by Merck to physicians in 2001 which significantly understates the heart risks faced by patients taking the medication. The letter says that only 0.5 per cent of patients in a clinical trial experienced problems. The real number was more like 14.6 per cent experiencing some problems, with 2.5 per cent encountering serious problems such as heart attacks.
“Y’all didn’t tell him the truth about the safety of Vioxx, did you?” Lanier asked Dr. Nancy Santanello, a senior Merck scientist. Y’all in big trouble, for sure!
Big Market Share = Big Problem
In the course of just four years in the marketplace, Vioxx was prescribed to 20 million people. In the workers comp system, it became the third most prescribed drug, just behind Oxycontin. While Oxycontin has proven to be highly addictive and a favorite of illicit users, Vioxx was never abused for pleasurable side effects. It was marketed as an anti-inflammatory medication for treating arthritis and pain. The drug was voluntarily withdrawn from the market last September. Lancet, the British journal, says that the company had enough alarming data to pull the drug all the way back in 2000, prior to the blandly worded letter that went out to physicians in 2001.
The drug is gone, but the lawyers are not going away any time soon. The financial implications are enormous. Epidemiologists have estimated that tens of thousands of Vioxx users may have suffered serious side effects from taking the medicine. One estimate has Merck paying out $18 billion — big bucks even for a drug company.
Lawyers are going to focus on three types of damages:
Physical pain and suffering, mental anguish and physical
Medical expenses associated with the allegedly defective product
loss of earnings and or earning capacity
For persons who have died, family members can bring a
wrongful death action.
If you google “Vioxx” you come up mostly with lawyers, who are offering free evaluations of your situation online.
The Workers Comp Angle
In its short but highly effective shelf life in the American marketplace, Vioxx became a best seller in the workers comp system. As the liability saga unfolds in courtrooms across America, workers comp insurers will be more than disinterested bystanders. Here’s why: heart attacks and strokes are known side-effects from taking Vioxx. Assume a worker took Vioxx for work-related lower back pain. In the course of treatment, he suffers a stroke and is permanently disabled. While there may be recourse in suing Merck, the first line of defense is workers comp: “I took the medicine for a work related injury. The medicine caused my stroke. Therefore, the stroke is causally related to my work injury.” Up go the reserves, up go the payments, up go the premiums.
Even if the worker pursues a third party action against Merck, there is no guarantee that the insurer will benefit very much from the subrogation. Judges often limit insurer recoveries in these situations. Insurers may end up absorbing much of the financial impact of the medication on their claim — which means, in turn, that some of the costs will be passed along to employers through the experience rating system. (It’s important to note, however, that due to the discounting of “excess losses” — those above $5,000 in each claim — the Vioxx burden will fall more on workers comp insurers than on the insureds.)
Remember Vioxx!
Is there a lesson here? We think that doctors are making some peculiar decisions in relying so heavily on exotic medications such as Vioxx and Oxycontin. We question the process that leads doctors to pick the most expensive medication where other proven, less expensive alternatives are readily available. We remain sceptical of the influence that drug companies exert on which medicines are prescribed and when. Perhaps insurers and pharmacy management programs should hand out free mugs to every physician in their networks, emblazoned with the motto: “Remember Vioxx.” It won’t cost much and it just might save a lot of money in the long run.