Wednesday, April 26, 2006

Merck Article in Fortune

Good stuff on regarding Merck's "fight every case" strategy:

"Merck's defense of Vioxx is beginning to look ugly - and costing the company millions in legal fees and punitive damages. But make no mistake, the company's fight-every-case strategy is still its only rational option ...

For those of you keeping score at home, Merck has some 11,500 more cases to fight. So far, the company has faced six plaintiffs (in five trials) and prevailed against three of them. They're playing .500 ball.

In spite of some high-dollar jury awards, the company's general counsel, Ken Frazier says he's satisfied with the better-than-expected win-loss tally.

The key question before juries is: Did Vioxx cause this particular plaintiff's heart attack? So far, some jurors show a willingness to hear both sides and eliminate plaintiffs who appear to have invalid claims.

That's exactly the kind of consideration Merck needs. Despite what they say, Merck's lawyers don't really intend to fight every one of these 11,000 cases. The company's current strategy is a temporary one.

To most legal experts, it's the only legal strategy that makes sense. "What's the alternative?" asks Andrew Kaufman, a professor of law at Harvard University. "If you establish a settlement fund at this point, you're asking more people to file suit. A settlement in the absense of trials means inflated costs."

The only scenario in which they won't settle is if they win so much that all the plaintiffs go away. Based on the record so far, that isn't likely to happen."