A Case Study of Ernst v. Merck & Co. Inc.
Michael W. Scott
Pamela C. Hicks
BEIRNE MAYNARD & PARSONS L.L.P.
1300 Post Oak Boulevard 25th Floor
Houston, Texas 77056
(713) 623-0887
1
605169v.2 iManage 990999
The Backdrop
The litigation climate for the pharmaceutical industry has become increasingly
challenging as media reports of huge company profits, fast-tracked FDA approvals, product
withdrawals, adverse drug reactions, increasing health care costs, and aggressive direct to
consumer marketing have become commonplace in the American media.
Headlines like:
“Company Denies Claim By New England Journal of Medicine That It Withheld Damning Drug
Information”; “New Legal Onslaught for Big Pharma?”; and “Strong Medicine – Drug Company
Profits Up” are daily copy. The industry is not exempt from attention by politicians and
regulators either. In the last two presidential elections, for example, candidates engaged in
heated debates about plans for addressing the rising cost of prescription drugs.
In addition, there is an increasingly negative overall public perception of corporate
America. From the fall of Enron to the recent oil industry investigations by Congress, big
business is an easy target for ridicule in many circles. There seems to be a new WorldCom or
HealthSouth story every month, and each corporate accounting charge is now looked at with
great scrutiny.
The public is bombarded with reports of scandals, government initiated
investigations, and criminal prosecutions that influence the perception of large companies and
the executives who run them.
Health care costs also influence juror perceptions. Most people feel that health care costs
are continually on the increase, while health insurance benefits steadily decrease. Reportedly,
prescription drug expenditures are the fastest growing component of health care costs, and
Americans spend more than $200 billion a year on prescription drugs. Industry critic, Marcia
Angell, claims that the cost of prescription drugs is rising three times faster than the inflation rate
and that drug companies have a profit margin of about 17 percent, compared with the median of
2
605169v.2 iManage 990999
3.1 percent for Fortune 500 companies. 1 Regardless of whether that is true, there is no doubt
that prescription drug sales generate staggering revenues, a fact of which the public is acutely
aware.
The increase in prescription drug usage is probably at least partially related to the rise in
direct to consumer marketing and drug detailing to physicians.
Television and magazine
advertisements are the primary means of informing the public of new drug offerings.
Prescription medications clearly have a brand identity, something that was unheard of 15 to 20
years ago.
According to the Kaiser Family Foundation, direct to consumer marketing
expenditures between 1994 and 2000 reportedly increased at an average rate of 45 percent per
year, topping out at about $2.5 billion. This increase translated into direct, measurable increases
in revenue from prescription drug sales. Merck allegedly spent as much as $160 million on
marketing for Vioxx during its first full year on the market. Meanwhile, due to intense industry
competition, the number of sales representatives for pharmaceutical companies has more than
doubled in the last decade to more than 81,500 detail representatives, all vying for precious little
face time with physicians.
There is also a growing public perception that pharmaceutical
manufacturers have too much influence over the FDA and academia.
The attitudes that potential jurors develop as a result of the intense media attention and
governmental scrutiny, as well as those they have from their own personal health care
experiences make trying a pharmaceutical product liability case a challenging proposition.
Nevertheless, Merck, following its “try every case” philosophy, went to the courthouse on its
first Vioxx case last summer in Angleton, Texas. The panelists in this discussion will analyze
that trial and discuss their thoughts concerning the lessons to be learned from the Ernst case.
1
Marcia Angell, The Truth About the Drug Companies, 45 Jurimetrics J. 465, 467 (2005).
3
605169v.2 iManage 990999
The Case
Vioxx, known generically as rofecoxib, is a COX-2 inhibitor. It blocks production of
cyclooxygenase, an enzyme produced by the body that stimulates chemicals which promote pain
and inflammation. In September of 2001, the FDA warned Merck that its Vioxx campaign,
which downplayed any cardiovascular dangers of the drug, was misleading to consumers. Then
in 2002, after nearly two years of contention with the FDA, Merck added “black box” warnings
about cardiovascular risks to the Vioxx label.
In September of 2004, Merck voluntarily
withdrew Vioxx from the market after one of its own long-term studies showed that the drug
increased the risk of serious cardiovascular events in patients who took the drug for more than
eighteen months.
On the eve of the Ernst trial, Merck was facing well over 4,000 lawsuits – including more
than one hundred class actions – filed by people claiming to have suffered heart attacks or
strokes after taking Vioxx. In time, the number of claims could rise significantly, as more than
20 million people took Vioxx prior to its withdrawal from the market. Despite estimates of an
additional 25,000 to 100,000 personal injury claims, Merck has voiced a strategy of trying every
claim.
Merck is also defending against lawsuits that seek damages for claims other than personal
injury or death. The Texas Attorney General filed an action seeking $250 million in damages for
Vioxx prescriptions covered under the Texas Medicaid program. The filing of that action just
before the Ernst case was scheduled for trial prompted the defense team to file an unsuccessful
motion for continuance. Merck has also been sued by uninjured Vioxx users making claims for
4
605169v.2 iManage 990999
consumer fraud, stockholders suing over deflated stock prices, and employees filing claims for
shrinking retirement funds. Clearly, Merck had much at stake in the Ernst trial.
The Parties
Carol Ernst brought suit for the death of her husband, Robert Ernst. Ernst was 59 at the
time of his death, and had taken Vioxx for less than eight months before dying from cardiac
arrest. A native of St. Louis, Ernst managed restaurants before moving to Texas and changing
jobs to work for the local Wal-Mart as a department manager and to teach aerobics classes. By
all accounts, Ernst was in top physical condition, competing in both marathons and triathlons.
Just one week before his death, Ernst and his wife competed in a 62 mile tandem bicycle ride.
Carol and Bob Ernst were married for a little less than one year.
Merck & Co., Inc. describes itself as a “global research-driven pharmaceutical company
dedicated to putting patients first.” Founded in 1891, the New Jersey based company “discovers,
develops, manufactures and markets vaccines and medicines in over 20 therapeutic categories.”
Vioxx was a blockbuster drug for Merck, generating as much as $2.5 billion a year in sales
before its withdrawal.
Their Counsel
Mark Lanier represented the plaintiff. Lanier, who is also a part-time Baptist preacher,
has been named as one of the nation’s top 45 attorneys under the age of 45 by The American
Lawyer magazine. His style is described as “folksy” and “charming.” During the course of the
trial, he used multimedia techniques in his presentation to capture the jury’s attention. His
opening statement incorporated Merck’s own documents into entertaining PowerPoint slides
accompanied by simple computer graphics of bulldozers, piles of money, and shell games to
5
605169v.2 iManage 990999
reinforce his themes. Rather than introducing testimony in a chronological fashion, Lanier
presented his case thematically – developing the “bad company case” and ideas of greed or
aggression with testimony and documentary evidence from a variety of sources. Reporters
lauded his “down home” story telling style, obviously appreciating the sound bytes that he gave
them for their copy.
Merck used defense lawyers from several large, well established firms to defend the case.
Its defense team included attorneys from Williams & Connolly, Fulbright & Jaworski, and
Hughes, Hubbard & Reed. At the forefront of the defense team were Gerry Lowry and David
Kiernan, both senior litigation partners in their respective firms. The defense strategy hinged on
specific causation, and the theme that science did not support the claim that Vioxx caused Ernst’s
death. The defense team presented its case in a very matter-of-fact, logical manner focusing on
the safety and health benefits of Vioxx over previous generations of pain medication and the
extensive studies of the drug prior to its approval by the FDA. The chronological presentation of
evidence by the defense was intended to have the jury focus on what Merck knew at the time of
Mr. Ernst’s death, which occurred in 2001, several years prior to the time the drug was
withdrawn from the market.
David Kiernan, a partner with Washington based Williams & Connolly, made the
opening statement for the defense. In contrast to Mr. Lanier’s more extemporaneous speaking
style and attention-grabbing visual aids, Mr. Kiernan reportedly appeared to read portions of his
opening. He illustrated his presentation with pie charts and long excerpts from FDA letters. The
news media were harshly critical of the defense, suggesting that the defense presentations were
dry, boring, soporific, and at times, insensitive.
The Venue and Jury Panel
6
605169v.2 iManage 990999
The case was tried in Angleton, Texas, a semi-rural town of 18,000 people just south of
Houston. While once known as a dangerous plaintiff’s forum, most defense attorneys familiar
with the area agree that it has become more conservative in recent years. Lanier had a “mixed”
track record with Angleton juries. In 1998, he won a $115 million verdict for 21 steel workers in
an asbestos case tried before the same judge. Last year, however, he lost a case in the same
venue.
During voir dire Mr. Lanier questioned the potential jurors for about three hours. He
referred to the panel members by their names, and often allowed them to speak at length. Rather
than using a tightly scripted voir dire format, Lanier seemed to flow in the direction he was lead
by the panel. Not surprisingly, Mr. Lanier used much of his voir dire to identify people who
might be unwilling to award damages for mental anguish.
Gerry Lowery of the Houston office of Fulbright & Jaworski conducted voir dire for
Merck. During her ninety minute presentation, she used a much more formal and traditional
style. Ms. Lowery referred to the panelists by their juror number, rather than by names. She
chastised Mr. Lanier for promising the jurors to be entertaining and emphasized the serious
nature of the case and the formalities of a court of law.
In their challenges, the defense team struck panelists who appeared impressed by Mr.
Lanier’s repeated references to his part-time preacher status. Several prospective jurors voiced
concerns about lawsuit abuse and large amounts of non-economic damages, and Lanier was
successful in excluding those panelists from the jury. The defense was unable to rehabilitate
panel members who said they could never award large amounts for non-economic damage.
From a pool of 93 potential jurors, a jury composed of 7 men and 5 women with middle and
working class backgrounds was selected. Juror ages ranged from young adult to middle age.
7
605169v.2 iManage 990999
The Judge
The Honorable Ben Hardin presided over the trial. He was appointed to the bench by
Governor Bush in 1995, and won election in 2000 and 2004. In 2004, he received $15,000 in
campaign contributions from Lanier and others at his firm. He also received $1,500 in campaign
contributions from Fulbright & Jaworski.
The Trial
The Ernst trial lasted more than seven weeks with the plaintiff presenting 15 days of
testimony and Merck presenting 6 days of testimony.
The primary defense themes were notice to Merck and specific causation. Ernst died of
an arrhythmia, or irregular heartbeat, yet no studies linked Vioxx to arrhythmia. The defense
noted that the evidence linking Vioxx and other COX-2 inhibitor use to adverse cardiac events
was based on the drug’s alleged propensity to promote blood clot related events – including
thrombolitic heart attacks and strokes.
The defense relied on the report of Dr. Maria Araneta, the pathologist who performed the
autopsy, in support of the company’s causation defense. She had concluded that Mr. Ernst had
undiagnosed, long-standing arthrosclerosis and that his sudden cardiac death was the result of an
arrhythmia rather than thrombosis.
The defense presented evidence that about 200,000
Americans die each year as a result of cardiac arrhythmias – most of them triggered by
atherosclerosis like that discovered in Mr. Ernst’s autopsy.
The plaintiff responded by arguing that Merck presented no credible theory as to why Mr.
Ernst would have died in his sleep from an arrhythmia. Lanier pointed out that Mr. Ernst’s heart
8
605169v.2 iManage 990999
didn’t fail during any of his numerous long distance runs or bicycle rides. If arrhythmia
triggered his death, Lanier argued that it would have been much more likely to have happened
under physical exertion. He mocked Merck’s theory that sleep apnea might have triggered the
arrhythmia when vigorous exercise seemed to have no adverse effect on Ernst.
Lanier argued that the pathologist did not detect a thrombosis and record it in her report
because of the techniques used in the autopsy. The pathologist’s deposition had not been taken
during the pretrial discovery phase of the case because she had since moved to the United Arab
Emirates, and lawyers for Merck had been unable to reach her. She did not respond to several
defense team emails attempting to contact her, later claiming that she had never received them,
possibly due to her spam filter.
Mr. Lanier did locate Dr. Araneta and spent $15,000 to fly her from the Middle East to
Houston to testify. In her deposition, taken in the middle of trial, the Araneta stated that
arrhythmia does not spontaneously occur. She testified that Mr. Ernst probably had a myocardial
infarction because a blood clot blocked blood flow to a partially occluded artery and that
vigorous CPR administered to Ernst probably dislodged the clot, which is why it was not
discovered in the autopsy. In her opinion, Mr. Ernst’s sudden death left no time for his heart to
show damage from the thrombosis.
When the deposition testimony was introduced to the jury, it dovetailed perfectly with
Lanier’s theory that Ernst’s heart attack killed him too quickly to leave evidence of tissue
damage. Lanier also used the Merck Manual in cross examination of Merck’s witnesses to
establish that arrhythmia in some form occurs in more than 90% of myocardial infarctions.
Lanier also argued that the Merck Manual describes how thromboses can dissolve in as short a
9
605169v.2 iManage 990999
time period as six to eight minutes, which explains the fact that a clot was not found in the
autopsy.
The defense focused the jury’s attention on Mr. Ernst’s short-term use of Vioxx. Studies
showed increased risk of adverse cardiovascular events only in patients who had taken Vioxx for
at least eighteen months. Mr. Ernst was on Vioxx for less than eight months. This evidence
helped the defense to advance its theme that Vioxx, like all drugs, carries some risk, but did not
cause the death of Mr. Ernst. Dr. Alan Nies, who was in charge of all Vioxx testing, testified
that Vioxx was an important step in pain management therapy because it could relieve pain
without causing stomach bleeding, a common side-effect of traditional pain medication.
Merck’s alleged knowledge of the drug’s cardiovascular problems prior to release was
another key issue at trial. Plaintiff presented emails from 1997, two years before Vioxx was
released to the market, indicating that clinical trials should exclude patients with cardiovascular
problems in order to decrease the cardiovascular event rate. Another document written in 2000
showed Merck’s top scientist stating that the clinical trials confirmed the heart risks. Lanier used
this evidence to argue that Merck went forward with a drug it knew to be unsafe. In response,
the defense team presented evidence that Vioxx underwent more clinical trials than many other
prescription drugs.
Lanier also emphasized that Vioxx need not be the producing cause of Mr. Ernst’s death
in order to render a verdict for the plaintiff. From his opening statement through closing, the
plaintiff reminded the jury that they need only find that Vioxx was a producing cause of Mr.
Ernst’s death, not the only cause. This allowed the plaintiff to effectively deflect the defense
team’s arguments that Mr. Ernst had unknown health problems, including atherosclerosis, which
caused his death.
10
605169v.2 iManage 990999
Merck’s marketing strategy was also attacked by Mr. Lanier. Lanier argued that Merck
intentionally deceived physicians about the adverse cardiovascular risks associated with Vioxx.
The plaintiff was particularly effective in using documents from presentations made to Merck
pharmaceutical representatives.
The plaintiff introduced into evidence a document titled
“Dodge!” and questioned Merck’s chief epidemiologist about the document. She testified that
the document was a “game” used by the marketing department to teach drug representatives how
to answer questions about Vioxx. Through skillful questioning, Lanier made the document
appear to be a game of dodge ball developed by the corporation to teach Merck’s sales force to
avoid questions from physicians about the safety problems of Vioxx. In post-verdict interviews,
several jurors commented on the fact that no one from Merck’s marketing department testified at
trial. In short, Lanier was able to characterize the evidence his way without being effectively
checked by testimony from Merck’s own company representatives.
The defense team handled this issue by arguing that the marketing strategy focused on
informing doctors, not avoiding them. They characterized Merck as a cautious company that
conducted more tests than necessary and worked in partnership with the FDA for approval.
Merck witnesses sought to deflect accusations from Lanier that the marketing department was
driving the development of Vioxx, and tried to reinforce the theme that Merck acted responsibly
and believed Vioxx to be safe up until the final study that prompted its voluntary removal. The
defense focused on Merck’s decision to voluntarily withdraw the drug from the market. That
theme, however, appeared to ring hollow with jurors. In post verdict interviews, they reported
that the withdrawal was not evidence of Merck’s corporate conscience. Instead, the jurors
perceived it as a preemptive move and that the FDA would have recalled the drug had Merck not
voluntarily done so.
11
605169v.2 iManage 990999
The defense elected to conduct a vigorous and aggressive cross examination of Mrs.
Ernst. Defense counsel questioned Mrs. Ernst for more than 90 minutes, at times reportedly
badgering the plaintiff, who was apparently a very sympathetic widow.
Defense counsel
questioned Mrs. Ernst at length about Mr. Ernst’s adult children from a previous marriage, whom
plaintiff did not know and who were not parties to the lawsuit. In its closing statement, the
defense suggested that a defense verdict would be good for Mrs. Ernst because it would alleviate
some of her guilt – a reference to testimony given by the plaintiff that she felt guilty for
recommending that her husband take Vioxx. In post verdict interviews, jurors said that they
found the intense cross-examination of Mrs. Ernst insensitive and irrelevant. One juror said it
“was wrong” for Merck’s lawyers to suggest that a defense verdict would be best for Mrs. Ernst.
The Verdict
The jury deliberated for a little more than ten hours before delivering a $253.5 million
verdict for the plaintiff. The actual damage award to Mrs. Ernst totaled $24.5 million, consisting
of $450,000 for pecuniary loss, $12 million for loss of companionship, and $12 million for
mental anguish. An additional $229 million in punitive damages was awarded, which was the
amount of additional profit Lanier suggested to the jury that Merck thought it could make by
beating Pfizer’s Celebrex to the market. After the verdict, Merck shares fell 7.7%, erasing more
than 5 billion dollars from its market capitalization.
The jury’s verdict will be drastically reduced by Texas’s punitive damage caps. Texas
law caps punitive damages at twice the economic damages and up to $750,000 in addition to
non-economic damages. Thus, the maximum punitive damage award allowed would be $1.65
million, for a total judgment of $26.1 million for Carol Ernst.
Lessons Learned
12
605169v.2 iManage 990999
Attorneys are responsible for setting the tone for their client’s case. The styles of these
opposing counsels were a study in contrast. Mr. Lanier spoke in plain terms, using themes
calculated to appeal to the jury’s emotions and their sense of justice. Throughout trial, he used
entertaining and easy to understand visual aides that often contained barbs at Merck’s executives
and corporate culture. He argued that Merck had once been a good company that went bad when
Ray Gilmartin became CEO in 1994. Lanier argued that under Gilmartin, Merck lost its moral
compass. He told jurors, “he took that company and made the needle always point to the dollar
sign.” The plaintiff’s case was presented with passion, and supported by key evidence developed
at the eleventh hour.
The defense team – made up of several attorneys rather than one compelling and
charismatic advocate – took the more traditional path of appealing to reason and logic. The
defense asked the jurors to focus on the scientific evidence rather than the emotional themes of
greed and corporate competitiveness emphasized by the plaintiff. Although the defense made
efforts to humanize Merck, for example, by introducing evidence that many of its executives and
top researchers used Vioxx, the jury was not presented with an emotional and impassioned
defense of a drug that Merck argues had helped so many people live pain-free.
Many of Merck’s key witnesses – including CEO Gilmartin – testified by deposition
rather than as live witnesses. In contrast, the plaintiff presented most of its witnesses in person.
One exception was the key testimony of the former coroner, Dr. Maria Araneta. This was a
strategic decision by Lanier. He told the press that he presented Dr. Araneta’s videotaped
deposition to reduce the chance that an appellate court would block her testimony or that the
testimony would be grounds for error after a verdict was rendered. One must wonder too
13
605169v.2 iManage 990999
whether Merck held back on cross-examining Dr. Araneta in the deposition under the
supposition that she would be called to testify live at trial.
Lanier commented in a post-trial interview that the defense team’s scripted trial strategy
changed his strategy for trying the case. He said “The defense also followed a script. Once we
realized that, we changed our game plan a lot to see if they could adjust on the fly. It was hard
for them.” Lanier was able to adapt to specific trial developments and incorporate them into the
plaintiff’s theory of the case. For example, when Merck representatives testified at trial that the
great majority of communications between the defendant and the FDA related to minor technical
matters such as font size, he pointed to letters where the FDA criticized Merck for a continuing
pattern and practice of corporate behavior to avoid complying with FDA disclosure
requirements. Lanier used Merck’s testimony that the communications involved minor and
technical matters to insinuate that the defense still downplayed the serious nature of its
disagreements with the FDA.
The press accused the defense of often being unable to react to unexpected events during
trial. When the pathologist who conducted the autopsy testified by deposition and “expanded”
on the autopsy report, Merck was unable to neutralize the testimony. In post verdict interviews,
jurors cited the pathologist’s testimony as key evidence. Merck’s counsel had emphasized the
neutrality of the witness and the importance of the autopsy report. However, that was prior to
the deposition in which she changed her testimony to support the plaintiff’s theory of the case.
Throughout the trial, Lanier and others on his team reached out to the news media.
plaintiff’s counsel regularly gave interviews both before and during trial. Many articles quoted
Mr. Lanier at length – allowing the plaintiffs to communicate directly with the public. In
contrast, Merck’s defense team rarely spoke to the press. In short, the plaintiffs controlled their
14
605169v.2 iManage 990999
message in the media. The defense relied on reporters to accurately restate and report defense
themes.
After the Ernst verdict was issued, lawyers quoted by the press pointed out that Lanier
had set out a roadmap for any plaintiff seeking to recover against Merck. In that first trial, key
documents and witnesses were identified that painted the picture of a company that was more
concerned with profits over the health of patients. That prediction proved to be untrue, at least
in part, as Merck won the second Vioxx trial in New Jersey in November, 2005. Jurors in that
case found that Merck properly alerted prescribing physicians to a link between Vioxx and an
increased risk of cardiovascular events, and found unanimously that there were no consumer
fraud violations in the way Merck marketed Vioxx to physicians. As a result, in the New Jersey
case, the jury never reached the question of proximate cause. Some in the plaintiff’s bar faulted
the trial strategy in that case for focusing on complicated scientific issues rather than on Merck’s
marketing campaign.
While it may still be too soon to understand the full effects of the Ernst verdict on the
Vioxx litigation as a whole, much about defending pharmaceutical products cases can be learned
from the trial. The trial strategy and style of the parties’ counsel was a study in contrasts.
Plaintiff’s counsel refused to stick to a script and remained adaptable throughout the case. He
was also very effective in delivering an impassioned story to the jury with strongly resonant “bad
company” themes. The defense appeared rigid in its adherence to plan – to such an extent that
their case appeared scripted to many observers. Of course, this might cause one to wonder to
what extent trial counsel actually had control over the trial of the case, and whether they were
able to bring their individual styles into play.
Clearly, those who defend pharmaceutical
manufacturers must effectively explore the FDA approval and warnings process with the jury,
15
605169v.2 iManage 990999
educate them on the science of general and specific causation, and explain the plaintiff’s
attempts to paint the company bad – all in a way that connects with – not bores – jurors. While
difficult, it may be more important, however, for counsel to elevate their case above the
banalities of science and personalize their clients in a way that presents a passionate defense of
the company and the product.
16
605169v.2 iManage 990999