Blame the Jury

Vioxx jury awards widow $253 million

Warning: Snark overload here ... I just recoil in endless irritation when I see the coldhearted explanations of how this news is supposed to make me feel sorry for Merck.

I'll admit, I don't really give too much of a rat's behind about the case behind this story (tragic as it was for Carol & Robert Ernst). But the process of this all invites some oft-asked/never-answered questions. So-called conservatives might well suggest (as some have) that the placement of this trial in the small-town of Angleton favors the plaintiff. Something along the lines of "middle class country folk just don't trust big bidness." Yet, if it were a murder trial (and seriously, HOW much difference is there, really?), there'd not only be no problem with whatever the jury came back with ... as long as it was the promise of another dead body. The GOP would also seek to limit the appeal options of the guilty party on top of that. So what gives? We've got a dead body, for crissakes. Yet we also have caps (brought on, in large part, by the Texas GOP) that will take a $253M jury award down to $26.1M due to $229M being punitive damages. So, I seriously want to know why it is that jurors are nothing more than simpleton morons incapable of being manipulated by plaintiff attorneys for a case like this, yet nothing short of noble, disinterested statesmen when hearing a death penalty case (and nevermind that all prosecutors are equally noble</snark>).

Anyways ... Tom, the esteemed legal eagle of The Woodlands, has one view from the other side. Among the links Tom passes on, is Ideoblog, which offers this:

The verdict was hardly surprising. As reported here, the plaintiff?s case featured resentment-mongering against executive pay and corporate profits, and exploitation of the average lay jury's innumeracy. For example, responding to witness Gilmartin?s argument that the results of a study showing Vioxx users had six episodes of heart attacks or strokes to one for placebo users were not statistically significant, the lawyer asked:

have you got $6 on you? I'm going to give you a dollar and you give me the six. It is not statistically significant in the difference. What do you think, are you in or out?

Mixed in with this brew was the misguided ?social responsibility? of Merck in completely withdrawing Vioxx rather than redirecting it to users for whom the benefits outweighed the risks. As I pointed out here,

in withdrawing Vioxx, Merck threw raw meat to the plaintiffs' lawyers who were already gearing up to prove that Vioxx was a dangerous drug.

If Merck hid evidence of the dangers of Vioxx it should have disclosed, maybe it mistakenly hoped the tardy bid for ?public admiration? (Holman Jenkins? words) would serve it well in court. In either event, the problem with Merck is not that it was ?socially irresponsible? but that it failed properly to maximize profits, which includes managing in light of future litigation risks.

I can't even begin to explain how morally wrong that last sentence is (and yeah, emphasis mine). I say that as one who places a great deal of faith in markets and a free, open economy. But markets are not moral entities. The rule set that defines markets is often just as important as market processes that lead to efficiency and all things wonderful. The problem with Merck was that they put a bad product on the market and tried to get away with it. Said product (not surprisingly for the pharma industry) has the distinct possibility of killing people ... in this case, via heart attack. And Merck tried to prohibit the coroner who did the autopsy from testifying because they knew the testimony would have the jury (rightfully) suggesting that the deceased's arrhythmia was likely caused by a heart attack. From the Chron, we get this:

In opening statements, Merck attorneys told jurors that the autopsy showed Ernst never had a heart attack. But in a video deposition, Araneta said she thinks a heart attack and blood clot most likely caused Ernst's fatal arrhythmia.

Here we have it, plain and simple, that Merck tried to pass off it's own statement as expert testimony while they were working to prohibit the one person who was much more likely to have better info. Social irresponsibility isn't some nebulous question of "stakeholder rights" or donating to worthwhile causes ... in this case, it's a matter of life and death. And Merck tried to pass off their responsibility in the matter. Simple as that.

As for the notion that this hurts more people than it helps by prohibiting companies from producing new drugs, color me doubtful. I just don't buy it when apologists for big companies claim we're all going to hell in a handbasket if we don't cave to said company's demands for maximum immunity. Nor do I accept it as a given that we should live with a statistical probability of X deaths per Y prescriptions. Apparently, the apologist crowd would stipulate this coldhearted reality as a necessity. It isn't. If a company can't find a means to survive in a business environment that says "when you take shortcuts that cost people's lives, you pay for it" then they don't deserve to be in business. Last I checked, after all, there were ample cars on the streets today despite Ford being held liable for their disasterous Pinto design. Those of us who do cling to social responsibility as a responsible ideal aren't out to kill off all business ... rather to rid the ones who have no good cause to put people's lives and well-being at risk. Merck, ultimately, may or may not fall into that category ... they obviously have no problem producing numerous drugs that do the world a lot of good. And more power to them. But they may well need the wakeup call of this verdict (and it's successors) to ensure a better way to produce a safer product.

Now, I've got no skin in this particular game. I don't claim that the plaintiff's attorney in this case was a paragon of everything great and wonderful at every blink of the eye. But still, when you reach any point where a product kills, there's got to be a degree of responsibility associated with it. We allow for businesses to incorporate (among other ways to classify it's ownership) to minimize and spread this risk. If this had been a case of the Merck CEO firing a gun and killing a person during the course of a board meeting, the CEO would be carted off to prison and gassed. But if the impersonal, collective actions of a company lead to the death of an individual (even if overseen by a muzzled watchdog like the FDA), there's no similar personal recourse ... only monetary. And for now, the so-called right cheers on at the success of tort reform that limits this liability. Because, Lord knows we need to kill more people with less immunity ... otherwise, this economy will never grow.

UPDATE: One good graf from the NYT to put some perspective on this matter:

The jury award represents about 1.1 percent of Merck's 2004 revenue, $22.9 billion, but it accounts for more than a third of the $675 million the drug maker has set aside for its Vioxx liabilities thus far.

Considering that the award is automatically limited, the math works out much more reasonably: .1 percent of their 2004 revenue and 3% of the amount Merck has already set aside for liabilities. In other words: chump change. And yeah, I think it is ultimately fair to compare that to CEO pay if the other side is going to draw alarms over the amount of this case. Still, Merck will lawyer the case to death so the $26M will probably get cut down still more (I'll put money on <$1 right now as the final settlement).

But hey, didya see the outlandish sum in the headline? What's up with that?

... ok, yeah ... still in a snarky mood.