By LYNN BREZOSKY
Associated Press Writer
Fri Apr 21, 5:21 PM ET
A state jury found Merck & Co. liable Friday for the death of a 71-year-old man who had a fatal heart attack within a month of taking its since-withdrawn painkiller Vioxx and ordered the company to pay $32 million. Merck said it would appeal.
The damage award will likely be reduced because of a state law capping punitive damages.
The jury of 10 men and two women deliberated for about seven hours over two days before returning the verdict in favor of the family of Leonel Garza, who had suffered from heart disease for more than 20 years and had taken Vioxx for less than a month.
The company was ordered to pay $7 million in non-economic compensatory damages and $25 million in punitive damages.
But the punitive damage amount is likely to be reduced since state law caps punitive damages at twice the amount of economic damages — lost pay — and up to $750,000 on top of non-economic damages, which are comprised of mental anguish and loss of companionship.
Because Garza was retired, the jury awarded no economic damages. That means the most Garza's family could receive under state law is $7.75 million.
"Merck will appeal," spokesman Kent Jarrell said.
"This is the first case in the country where short-term usage has been found by a jury to be causatory of heart attacks," said plaintiffs' attorney Joe Escobedo. "We hope this will go a long way in dispelling this '18-month' science fiction myth."
Vioxx was found to greatly increase the risk of heart attacks in people who took the painkiller for 18 months or longer.
"I just don't think there's any basis to the verdict that came down today," defense lawyer Richard Josephson said.
Lehman Brothers analyst Tony Butler said he was "a little shocked by the verdict given all of Mr. Garza's health problems." He thinks Merck is pursing the correct strategy by trying each case individually because in the past drug companies have only forked over big settlements when they entered into massive class action suits.
"I don't see any pressure on them to settle in the near term," Butler said.
But the defense lawyer Josephson noted that such verdicts are common in the blue-collar Rio Grande Valley.
"Starr County has always been a difficult jurisdiction for corporate defendants. .... The people here are good people, they just tend to favor individuals in cases where there are corporate defendants involved. It's just a fact of life."
Garza family members left the courthouse without comment to attend a mass for Leonel Garza on Friday, the 5th anniversary of his death.
The case was the sixth of 11,500 lawsuits to reach a verdict and brings Merck's scorecard in the trials to three wins and three losses.
Merck shares fell 26 cents to close at $34.74 on the New York Stock Exchange. They are still near the upper end of their 52-week range of $25.50 to $36.65.
Jason Napodano, an analyst at Zacks Independent Research, said he thinks Wall Street is becoming numb to the Vioxx trials.
"This kind of stuff is going to keep happening. They are going to win some and lose some," Napodano, who won't recommend Merck until the litigation has reached some sort of settlement.
In the prior two losses, the New Jersey-based pharmaceutical company was ordered to pay one plaintiff $253.4 million, which will be reduced to $26 million under Texas caps on punitive damages; and the other $13.5 million.
Attorneys for Garza said that while Garza had a history of heart problems, his veins had been cleared and a stress test showed less than a 2 percent risk of heart attack within a year. They said he had taken the drug for almost a month before he died in April of 2001.
Merck lawyers argued there was no proven link between heart problems and use of the drug for less than 18 months and said there was doubt whether Garza had taken the drug for more than a week. They said the heart attack was the end result of Garza's 23 years of heart disease.
Attorneys for Garza's family asked the jury to award $22 million in compensatory damages and $1 billion in punitive damages.
Escobedo said studies showed the drug caused "excess cardio events" years before the drug was introduced and e-mails between Merck employees and medical consultants showed doubt as to whether it should be marketed to certain populations. He said Merck was in a race to release a potential blockbuster arthritis drug and ignored its dangers.
In his closing statements, Josephson reviewed Garza's history of heart disease, beginning with a quadruple bypass in 1989. He also noted Garza's smoking habit.
"He had every single risk factor that you can have," he said.
The case went to trial on Jan. 25, but the judge's schedule allowed only one week of testimony each month.
Vioxx was pulled from the market in September 2004, when a study showed it could double risk of heart attack or stroke if taken more than 18 months.
Plaintiffs in this and other cases say Merck executives knew by 2000 to pull the drug because of its cardiovascular risks, but kept quiet because the drug was so profitable.
AP Business Writer Theresa Agovino in New York contributed to this story.