NEW YORK (CNN/Money) -
The first Vioxx trial is expected to close next week in Texas, but this is just the beginning of Merck's legal battle against more than 4,000 lawsuits from plaintiffs blaming Vioxx for health problems and untimely deaths.
In September, the battle continues in Merck & Co.'s (down $0.58 to $30.51, Research) home state of New Jersey, where the company will face Frederick Humeston, a twice-wounded Vietnam veteran who blames Vioxx for his 2001 heart attack.
The outcome of Vioxx litigation is yet to be seen, but Merck shares have already suffered. The company's stock price plunged by about one-third the day Merck pulled Vioxx off the market on Sept. 30, 2004 and has not recovered.
On Sept. 12, jury selection begins in the first of about 2,300 Vioxx cases filed jointly through New Jersey Superior Court in Atlantic City under Judge Carol Higbee. New Jersey's 56-page list of plaintiffs represents more than half of all Vioxx cases. Like Humeston, who lives in Boise, Idaho, many of these plaintiffs live out of state and filed their suits in the New Jersey court because the company is based in Whitehouse Station.
More than 4,000 Vioxx-related lawsuits have been filed against Merck, according to the drug maker's defense team, including 1,800 federal cases, 119 pending state cases, and 2,400 cases in New Jersey, which accounts for most of the state cases.
This tally is expected to grow. Judge Eldon Fallon, who is presiding over all federal cases in New Orleans district court, told reporters in May that lawsuits could ultimately reach 100,000. The first federal case begins on Nov. 28, with a pre-trial conference on Aug. 25.
Merck has vowed to defend itself in all cases.
"We intend to try these cases one by one and that is exactly what we are doing," said Kent Jarrell, spokesman for the Merck defense team.
Vioxx, an arthritis painkiller, was approved by the Food and Drug Administration in 1999. Merck withdrew its $2.5 billion blockbuster from the market after a study raised concerns about health risks.
Humeston, a postal worker and Marine Corps veteran, took Vioxx as a painkiller after he suffered a work injury to his right knee, according to papers filed in New Jersey Superior Court by Merck lawyers. Humeston continued to take Vioxx when he noticed it also reduced pain in his left knee, which was peppered by shrapnel in Vietnam, according to the papers.
Humeston, who was 56 when he suffered his heart attack, believes that Vioxx caused the blot clot that lead to the attack.
"Vioxx is a drug that has been implicated in causing clots," said Humeston's lawyer Christopher Seeger. "[Humeston] is a guy with a healthy heart with no evidence of disease and he has a clot. Getting to Vioxx from that point is not difficult. Vioxx causes clots."
Merck's lawyers contend that Vioxx did cause not Humeston's heart attack. "There is no evidence that the clot would have been smaller or less significant without Vioxx, much less that it wouldn't have happened at all," read the papers filed by Merck lawyers.
The Merck lawyers also wrote that Humeston's case presents "little more than guilt by temporal association – that is, he had [the heart attack] while on Vioxx so Vioxx must have caused it. This is not the kind of rigorous and well-supported scientific reasoning demanded by New Jersey law."
In the bellwether case in Texas Superior Court, Carol Ernst sued Merck for the 2001 death of her husband, Vioxx patient Robert Ernst. Ernst blames Vioxx for causing her husband's fatal arrhythmia, while Merck lawyers insist that Vioxx doesn't cause arrhythmia.
Ernst's lawyer, W. Mark Lanier, also accused Merck of concealing information about the health risks of Vioxx, a charge that Merck has consistently denied.
Lanier said the Ernst case could close next week, possibly by Wednesday. Though Lanier and Seeger have not specified the damages they're seeking, analyst Chris Shibutani of J.P. Morgan Chase has estimated that Merck's liabilities from all cases could range from $8 billion to $25 billion.
The outcome of the Texas case will give a "big psychological boost" to either Merck or the thousands of plaintiffs, depending on which side emerges as the winner, said attorney and legal expert Chip Babcock, chair of the Texas Supreme Court advisory committee.
A Merck victory in the Ernst case "would demonstrate they're on the right track in how they present a case to the jury," said Babcock. "Their defense in both cases [Ernst and Humeston] is basically the same, which is the science doesn't support the plaintiff's theory. If Merck loses [the Ernst case,] they'll say every case is different."
Babcock said that Merck's vow to fight every case individually is a message to plaintiffs that there will be no settlement, and therefore no easy solution.
"Merck is trying to send a very strong signal out there: 'Don't think you're going to toss you're hat in the litigation game and wait a couple months and we're going to toss you some money,'" said Babcock. "They're saying, 'If you're going to play the litigation game, you better be serious.'"
For more stories about Fortune 500 companies, click here.
For a story about Merck's take on direct-to-consumer drug advertising, click here.