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Business Observer Friday, Oct. 29, 2004 16 years ago

Vexed by Vioxx

Plaintiffsi lawyers rush to attract Vioxx litigants. Tampa attorney Brenda Fulmer filed a Vioxx complaint a year ago.

Vexed by Vioxx

Plaintiffsi lawyers rush to attract Vioxx litigants. Tampa attorney Brenda Fulmer filed a Vioxx complaint a year ago.

By David R. Corder

Associate Editor

Nothing really distinguished the ad Alley & Ingram PA published in early October in the front section of a daily Tampa Bay area newspaper. The announcement let consumers know the personal injury law firm would handle claims against Merck & Co. Inc. over the use of Vioxx. Just four days earlier, the New Jersey-based pharmaceutical maker withdrew the prescription painkiller from the market amid concern it caused heart attacks, strokes and other ailments.

The same day, Tampais Clark Charlton & Martino PA also bought a newspaper ad. Soon St. Petersburgis Beltz & Ruth PA published a string of Vioxx ads. So did Palm Harboris Florin Roebig PA and Pinellas Parkis Saunders & Walker PA. Those ads havenit stopped.

Meanwhile, other top personal injury firms throughout the Gulf Coast region o such as Tampais James Hoyer Newcomer & Smiljanich PA and Wilkes & McHugh PA o revised Internet Web sites to promote their availability to litigate Vioxx claims.

It appears Vioxx is about to become the latest moneymaker for product liability litigators o plaintiff and defense o in the vein of Fen-Phen, the diet drug that to-date has cost Wyeth, another large New Jersey-based pharmaceutical maker, almost $17 billion in claims.

Alley & Ingram partner Brenda Fulmer appears to have filed the first Vioxx lawsuit in the Tampa Bay area about a year ago. She also filed one in New Jersey. That gives her practical insight into the pharmaceutical giantis legal strategy.

Although hesitant to talk publicly about the litigation, Fulmer says she has an edge against other Gulf Coast-area attorneys who are only now advertising their services to Vioxx victims. But thatis only part of the equation. Over the past decade, this Stetson University College of Law graduate gained experience in battles against Wyeth over Fen-Phen and Bayer AG over Baycol, the cholesterol reduction drug.

iCertainly, having a yearis head start on everyone else is helpful,i she says about the Vioxx lawsuits. iNow there is a heightened awareness. There is a number of (Vioxx users) who have contacted my office and who also had heart attacks.i

One thing also is certain, Fulmer adds, the recall of Vioxx o a non-steroidal anti-inflammatory generically known as rofecoxib o made her job a lot easier.

iBasically, with the recall of the drug, we do not have the same legal hurdles that we faced before,i she says. iThere now are certain legal presumptions about the safety of the drug. The (federal) Food and Drug Administration no longer believes the drug is safe or effective.i

Marshalling resources

Fulmer filed a negligence action last October on behalf of Refic Kozic in the Hillsborough County Circuit Court, alleging the heart attack Kozic suffered in April 2001 was caused by his use of Vioxx. In the Kozic lawsuit, Fulmer claims Merck & Co. knew of Vioxx defects then even as the company executed a mass media advertising campaign that touted the drugs benefit as an arthritic pain reliever.

During the first seven months of this year, Merck & Co. spent about $49.3 million on Vioxx direct-to-consumer advertising, according to research published in Advertising Age, the advertising industryis trade journal. Magazine research also shows the pharmaceutical company spent about $100 a year since it rolled out Vioxx in mid-1999. A Merck & Co. spokesperson would not confirm the trade journalis research. She says the company classifies its advertising spending as proprietary.

Fulmer knew this would be a tough battle for a couple of reasons. For one, the company has deep pockets. It reported net income of $6.83 billion, or $3.03 a diluted share, on total sales of $22.49 billion for the year ended Dec. 31.

Then there is Fulmeris courtroom opponent.

Merck & Co. has a 25-year client relationship with one the nationis top law firms: New York-based Hughes Hubbard & Reed LLP. Last month, American Lawyer magazine ranked Hughes Hubbard on its annual A-List, a list of the top 20 U.S. law firms.

To bolster her chances of success, Fulmer partnered with a co-counsel: Beasley Allen Crow Methvin Portis & Miles PC. Over its 25-year history, the Montgomery, Ala.-based firm has won verdicts or settlements totaling almost $15 billion.

Then the legal chess match began.

In February, Hughes Hubbard asked the U.S. District Court, Tampa, to take jurisdiction over the Kozic lawsuit. Fulmer argued against change of venue.

iThe plaintiff should have the right to choose the forum, when a case is wrongfully removed to federal court, because the defendant receives procedural advantages in the federal system,i she says. iThe case should rightfully be in Hillsborough County.i

U.S. District Judge James D. Whittemore agreed. In August, he remanded the case to state circuit court.

Meanwhile, Hughes Hubbard answered Kozicis allegations of strict liability, negligence, negligent misrepresentation and fraud. On Merck & behalf, the law firm denied each allegation. Then the firm cited 30 affirmative defenses.

iTo the extent that plaintiff asserts claims based upon an alleged failure by Merck to warn plaintiff directly of alleged dangers associated with the use of Vioxx, such claims are barred because Merck has discharged (its) duty to warn in (its) warnings to the prescribing physicians,i the company claims as its sixth defense.

In its seventh defense, Merck & Co. put the burden on Kozic. iIf plaintiff had sustained injuries or losses as alleged in the complaint, such injuries or losses were only so sustained after plaintiff knowingly, voluntarily and willfully assumed the risk of any injury as a result of the consumption of, administration of or exposure to any drug or pharmaceutical preparation manufactured or distributed by Merck or other manufacturer,i the lawsuit states.

Prior to the Sept. 30 recall, the company classified as frivolous all Vioxx product liability claims. iThe company believes that these lawsuits are without merit and will vigorously defend against them,i it declared as recently as an Aug. 6 financial statement.

In an Oct. 21 statement, the company disclosed it knows of at least 300 potential Vioxx lawsuits that claim at least 900 plaintiff groups. Instead of attacking the merit of such litigation, however, the company disclosed it has product liability insurance for Vioxx claims up to $630 million.

That insurance would not just apply to the Vioxx personal injury claims. In the Louisiana federal courts, for instance, several Merck & Co. shareholders petitioned for class action status last year against the company on charges it issued false and misleading statements about Vioxx.

iThe company is unable at this time to determine whether the companyis insurance coverage with respect to the Vioxx personal injury lawsuits and the Vioxx shareholder lawsuits (collectively, the Vioxx lawsuits) will be adequate to cover its defense costs and losses, if any,i the company advised. iThe company has not established any reserves for any potential liability relating to the Vioxx lawsuits. A series of highly unfavorable outcomes could have a material adverse effect on the companyis financial position, liquidity and results of operations.i

Tough job ahead

Pinellas Park attorney Joseph Saunders also has years of experience in the area of pharmaceutical product liability. He has litigated several hundred claims against Wyeth over Fen-Phen. Unlike Fen-Phen, however, Saunders expects a challenge in proving the Vioxx claims.

iItis a little more difficult to screen the cases because Vioxx has been shown to trigger heart attacks and strokes,i he says. iBut the population of people (mostly elderly patients) taking Vioxx generally have a high number of risk factors for those conditions.

iSomebody who has chronic arthritis is the same type of patient to have pre-existing coronary artery disease,i he adds. iSo when they have a heart attack or stroke, itis takes a bit of medical detective work to determine what caused it or to what degree Vioxx contributed.i

Thatis why stock analysts donit expect publicly traded Merck & Co. to take as severe a financial hit as Wyeth did with Fen-Phen.

iCausation is going to be difficult to prove because strokes and heart attacks have many causes, so providing that Vioxx caused a particular injury may be difficult,i Tim Anderson, a Prudential Equity Group analyst says in a recently published stock report. iWith some other well-known product liability cases, causation was easier to demonstrate (e.g., asbestos and mesothelioma, Fen-Phen and heart value damage o each of these caused a characteristic lesion that was fairly easily associated with drug use).i

In his report, Anderson made a preliminary estimate: Of about 84 million Vioxx users, research shows only about 5.5 million used the drug for 18 months or more. Studies show the incidence of cardiovascular problems increased for patients who used Vioxx for 18 months or more. Calculating for rates of incidence, Anderson estimates about 83,160 patients may have legitimate claims.

Anderson expects about 20% of those 83,160 patients to file lawsuits, he says. That would be about 16,632 potential Vioxx claims.

Based on client inquiries, Saunders expects the number of Vioxx clients heill represent to reach well into the double-digits. He wasnit willing to provide a specific estimate. But the anticipated number is far less than the several hundred Fen-Phen clients he has represented.

iMany more people took Vioxx,i Saunders notes. iOnly 6 million took Fen-Phen. Around 80 million have taken Vioxx.i

Still, Saunders acknowledges he and his staff have a tough job ahead. To get a more precise analysis of all the factors, his firm developed a computer algorithm to assess potential client injury from Vioxx use. He used a similar algorithm with Fen-Phen. He says such calculations help to minimize the potential for frivolous pleadings.

iItis expensive to get large numbers of medical records,i he says.

Since product liability attorneys primarily work on contingency fees, that means lawyers must pay those costs up front o even if they later lose a case.

iWe have a responsibility to make sure the cases we file have some merit,i he says. iEverybody is concerned about frivolous lawsuits. We try to make a great effort to back up the cases we bring with good science.i

Thatis a strategy Fulmer endorses. iWe want to be very certain that the cases filed are legitimate claims and are supported by medical records as well as expert opinions,i she says. iThatis the same standard I would use for any case, for that matter.i

Early concerns

Concern about the safety of Vioxx emerged fairly quickly in the relatively short time Merck & Co. sold the drug.

In May 1999, the FDA cleared Vioxx as a once-daily anti-inflammatory. Test results showed the drugis effectiveness against a human enzyme known as cox-2, a gene responsible for pain. The nation became the 47th to clear the drug for consumer sales.

Company financials published in March 2000 touted Vioxxis use in treating the symptoms of osteoarthritis and other acute ailments such as menstrual pain. The company also marketed Vioxx to dentists for oral surgery purposes. It claimed possibilities as a treatment for Alzheimeris disease. It even began studies to test the drugis effectiveness in treating colon polyps.

iVioxx remains the countryis fastest growing prescription medicine,i the company claimed in its 1999 annual report. The companyis anti-inflammatory sales totaled $2.68 billion last year, up from $2.59 billion the year before. Vioxx accounted for at least 95% of the companyis anti-inflammatory sales last year.

Given FDA approval in 1999, the company did not submit its Vioxx test data for peer review and national publication until about a year later. Later that year, the New England Journal of Medicine published concerns about the use of Vioxx and myocardial infarctions o heart attacks.

In light of the early scientific concerns, a newly published medical journal report criticizes the company and the FDA over their handling of Vioxx.

iThe company sponsored countless continuing medical eeducationi symposiums at national meetings in an effort to debunk the concern about adverse cardiovascular effects,i Eric J. Topol, MD, wrote in the trade journalis Oct. 21 issue.

iOver the course of the five-and-half-year saga, many epidemiologic studies confirmed and amplified the concern about the risk of myocardial infarction and serious cardiovascular events associated with rofecoxib,i Topol writes.

Yet, Topol adds, Merck & Co. continued to invest almost $100 million a year in direct-to-consumer Vioxx advertising.

iConsidering the tens of millions of patients who were taking rofecoxib, we are dealing with an enormous health issue,i Topol writes. iEven a fraction of a percent excess in the rate of serious cardiovascular events would translate into thousands of affected people.

iI believe that there should be a full congressional review of this case,i he adds. iThe senior executives at Merck and the leadership at the FDA share responsibility for not having taken appropriate action and not recognizing that they are accountable for the public health.i

Such scientific declarations give attorneys such as Fulmer and Saunders additional ammunition as they begin litigation.

iThis (scientific article) blasted the drug companies and the FDA for being lax,i Saunders says. iThis isnit spin from Merck. This is from medical professionals. I think itis instructive for people to see (the journal article). This is the premier medical journal physicians rely on for scientific data.i

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