The Vioxx litigation: disincentivizing patient safety through misdirected tort rules.

• Author: Wolsing, Jennifer

THOUGH MANY believe that the tort system provides the best incentive for manufacturers to promote and manufacture their products safely, (2) the Vioxx litigation proves that the tort system can act as a disincentive against manufacturer transparency, pharmaceutical development, and public safety. This Article examines Merck's liability for the pain reliever Vioxx. It concludes that, paradoxically, Merck's increased product liability arises from Merck's diligent efforts to protect the public. When Merck published its numerous studies on Vioxx's efficacy and cardiovascular safety, Merck provided plaintiffs with a wealth of data that could be used against it. Furthermore, by voluntarily withdrawing Vioxx, Merck alerted lawyers and potential plaintiffs to Vioxx's potential for harm.

This Article proposes its own solution to the Vioxx litigation's harmful incentives: a statute that allows defendants to enjoy a rebuttable presumption of ignorance before the end of a timely reported study, and suppresses evidence that a manufacturer withdrew a drug if the plaintiff tries to use it to demonstrate negligence or failure to warn. This proposed statute encourages rapid release of study data by providing valuable litigation relief to responsible drug companies. It also mitigates the red flag effect that occurs when a manufacturer withdraws a potentially dangerous product. Consequently, this Article's suggestion effectively responds to the current tort regime's detrimental incentives against study publication and voluntary drug withdrawal.

Merck developed Vioxx, (3) a selective cyclo-oxygenase-2 (hereinafter "COX-2 inhibitor"), as a stomach-friendly alternative (4) to other common nonsteroid anti-inflammatory pain medicines (hereinafter NSAIDs). Since 2001, all COX-2 inhibitors--but especially Vioxx-have been embroiled in a controversy regarding their prothrombotic effects. (5) Since Merck voluntarily recalled Vioxx from the market, the only remaining marketed COX-2 inhibitor is Pfizer's drug, Celebrex. (6) Like Vioxx, Celebrex can cause serious cardiovascular problems. Unlike Vioxx, however, Celebrex carries a significantly higher risk of negative gastrointestinal effects. (7)

Nonetheless, plaintiffs have filed over 28,000 personal injury lawsuits involving over 45,000 plaintiff groups, and another 265 class actions against Merck based on Merck's alleged failure to warn of Vioxx's negative cardiovascular profile. (8) Merck has so far set aside over $970 million for legal costs. (9) Merck recently struck a $4.85 billion settlement to resolve its products liability claims. (10)

This Article is broken into three parts. Part I briefly examines Vioxx's research timeline. Part II concludes that Merck experienced tort liability because of its published studies and its choice to withdraw Vioxx and then discusses the corresponding bad incentives that the Vioxx litigation has created. Pharmaceutical manufacturers are encouraged to publish fewer studies and to tarry in pulling potentially dangerous drugs from the market. Part III examines four possible solutions to this problem: FDA preemption of tort claims; increased FDA involvement in drugs' post-marketing stage; Dan Cahoy's Full Disclosure Proposal, which would bar plaintiffs from using defendants' studies against defendants; and my own two-pronged proposal, which is put forth in Part IV.

Part I. The Science behind the Litigation

The FDA approved Vioxx in May 1999. (11) In March 2000, an 8,000-person, Merck-instigated study called Vioxx Gastrointestinal Outcomes Research ("VIGOR") proved that Vioxx caused approximately 47% fewer gastrointestinal problems than naproxen, a competing NSAID that did not selectively inhibit the COX-2 isoenzyme. (12) The study also demonstrated that the cardiovascular event rate in the Vioxx group was five times as high as in the naproxen control group. (13) In November 2000, Merck reported the VIGOR data in the New England Journal of Medicine. (14)

Between March 2000 and September 2004, scientists "debated the meaning and importance of the VIGOR Trial cardiovascular data." (15) Yet, the scientific community did not reach a consensus against Vioxx until 2004, when Merck concluded that Vioxx increased the "relative risk for ... heart attacks [or] strokes" after eighteen months of treatment, as compared to patients taking a placebo." (16) Foregoing billions of dollars of profits, Merck voluntarily removed Vioxx on Sept. 30, 2004. (17)

Part II. Conclusions and Incentives

As a result of the Vioxx litigation, Merck has endured not only burdensome tort liability, but also intense negative publicity from the media and Congress alike. (18) This Part examines three possible reasons and concludes that the most likely reasons for Merck's liability were Merck's choice to withdraw Vioxx from the market, and Merck's willingness to undertake and publicize its studies.

1. Possible Explanations

   One might expect the reason Merck incurred such liability was because Vioxx is an inherently dangerous drug. However, as explained in Part I, Vioxx is a reasonably safe drug for individuals without cardiovascular risk factors, such as obesity or advanced age, and an extremely safe drug for people with gastrointestinal risk factors. (19)

   One might also presume that, as many plaintiffs argued, Merck suffered from such publicized tort liability because of intentionally or negligently misleading advertising. In fact, however, following the one and only warning Merck received for its marketing efforts, (20) the FDA deemed its concerns about Merck's Vioxx marketing "satisfactorily resolved" and "closed." (21)

   A more likely explanation is that Merck conducted and published a great deal of tests on Vioxx. Merck conducted and published the results of five tests in four years. (22) Consequently, plaintiffs' lawyers could easily find and utilize Merck's data against Merck. In addition, Merck voluntarily withdrew its drug from the market, thus creating a "red flag effect" that attracted litigation.

2. Incentives

   If the above conclusions are true, then the tort system has produced three pernicious incentives. First, pharmaceutical manufacturers may decide to provide conspicuous warnings detailing every possibility of harm. Multiple warnings tend to produce a dilution effect, where "the many low importance warnings 'dilute' the strength of important ones." (23) The FDA has found that multiple, complex drug warnings do not "optimally communicate ... information," because heath care providers have a more difficult time finding specific information and ascertaining which warnings are "the most critical." (24)

   Second, the Vioxx litigation increases drug manufacturers' incentives to either produce fewer studies, or to stop submitting information for public review. (25) No one predicts that pharmaceutical companies will stop producing or publishing information entirely, however, because there are strong fiscal incentives that favor producing and publishing studies. (26) Consequently, William Vodra explains that the Vioxx litigation will cause drug companies to question not whether they will conduct studies at all, but whether they want to do additional studies beyond the bare minimum to obtain FDA approval or to keep their product viable. (27) A more nuanced strategy might include selectively publishing study results. Yet, the public benefits from drug companies conducting and publishing as many studies as they deem worthwhile. (28)

   Third, the Vioxx litigation incentivizes pharmaceutical manufacturers to keep drugs on the market, even if the drug may harm patients. Lawyers may wisely advise their drug company clients to phase out potentially harmful drugs slowly, rather than to withdraw them abruptly, to avoid the "red flag" effect of alerting plaintiffs and trial lawyers that a drug may be dangerous. This practice may keep potentially harmful drugs on the market for longer periods of time than would occur if manufacturers felt free to withdraw their drugs at will. A more troubling unintended consequence of our tort system could hardly be imagined.

   Part III. Solutions

   These perverse incentives against study publication, withdrawal, and clear warnings act against manufacturer transparency, (29) pharmaceutical development, (30) and public safety. (31) Politicians and commentators have put forward three possible solutions, including: (1) FDA preemption of tort claims at the state and federal levels; (2) Increased FDA involvement in drugs' post-marketing stage; and (3) Dan Cahoy's Full Disclosure Proposal, which bars plaintiffs from using defendants' studies against defendants, provided the defendants timely disclose their self-conducted product studies.

   While no solution will ever be perfect, implementing these proposals would not only create additional problems in our tort system, but would also fail to sufficiently address the disincentives facing pharmaceutical manufacturers. In contrast, this Article's proposal, discussed in Part IV, mitigates the "red flag" effect through a variation on a familiar rule of evidence, and also provides litigation relief to defendants without unfairly burdening plaintiffs.

1. FDA Preemption

   On January 24, 2006, the United States Food and Drug Administration ("FDA") released a controversial (32) preamble to its new prescription drug regulations. (33) In the preamble, the FDA claims that its drug labeling regulations and decisions preempt "conflicting ... State law" and product liability court decisions. (34) Notwithstanding the common law precedent disfavoring preemption, (35) the FDA claims that its standards establish "both a 'floor' and a 'ceiling'" on pharmaceutical safety standards. (36) Further risk disclosure requirements can hurt patients because more disclosure "can erode and disrupt the careful and truthful representation of benefits and risks that prescribers need to make appropriate judgments about drug use. Exaggeration of risk could...