Merck’s defense of Vioxx

Bruce Japsen of the Chicago Tribune is reporting that Merck’s case-by-case defense on Vioxx aims to cap payouts:

It’s a strategy industry analysts say may help Merck avoid the huge payout brought on by another high-profile prescription liability case: the diet pill debacle known as fen-phen. The pill combination was linked to heart valve damage and subsequently yanked from pharmacy shelves in 1997…

“The industry watches large class actions-type lawsuits because you wonder if it is ever going to become a Wyeth [fen-phen maker] scenario where the costs could balloon out of control,” says Michael Zbinovec, director of corporate finance and a pharmaceutical analyst for Fitch Ratings in Chicago.

Also,

“If the strategy is working, keep it up and if they start losing–either too many patients or too big award sizes–they can then propose a global settlement,” said Winton Gibbons, a pharmaceutical industry analyst with William Blair & Co. in Chicago.