Eric, I believe pharmaceutical companies should spend more time, money and resources on research. If you've ever engaged in statistical studies, you know that, the larger your pool of test subjects and the longer the period of observation, the smaller the margin-of-error for your results.

Sure, it costs more money to conduct more stringent tests. But you could pay for it in the short term by cutting back on your direct-to-public advertising ... and, in the long term, by drmatically reducing - or eliminating, altogether - the punitive damages from civil lawsuits.

Jeff, according to Merck's SEC filings, over the past five years it has spent right at 40% of its net operating income for R&D. How much more should they be spending?

This is a hugely complicated issue, and I'm not necessarily defending Merck with respect to Vioxx. It does bear the responsibility for ensuring that its products are generally safe, with any risks being clearly enumerated. But, there's no such thing as a 100% safe drug.

At the same time, $229MM judgments -- which, of course, won't survive appeal in this case -- raise the question of how badly "we" need to hurt companies who make mistakes. Is it conscionable to drive the company out of business? Do the other stakeholders...those who depend on Merck medications such as Zocor, Propecia, Fosomax, Singulair, etc....have any skin in the game? Should we care if they can no longer get those meds if Merck ceases to exist? And what about the dampening effect on R&D by other drug companies, if these kinds of judgments can be upheld?

Again, Merck may very well have screwed up royally, and deserves some significant payback. But I don't have enough faith in the way our legal system now works to agree at all with your observation that spending more money on R&D will reduce or eliminate punitive damages by one farthing.

[The issue of direct-to-public ads is an interesting one, by the way, and probably good fodder for a separate discussion. I would posit that the pharmcos are responding to demand, rather than generating it.]

Eric, in Merck's case, I can't say, since I don't know any specifics of the studies and trials that preceded Vioxx' release on the market. This may or may not change in the day's ahead. In previous cases involving pharmaceuticals, it was later shown that those studies were not as thorough as they might/should have been. Whether or not this turns out to be the case for Vioxx, I don't know.

Some more information on this idea - admittedly from different and sometimes subjective perspectives - can be found at http://www.adrugrecall.com/ , http://www.fda.gov/cder/drug/ and http://www.emedicinehealth.com/alerts.asp

Mine was an opinion about the industry in general, and I still hold to that statement.

Another general statement, and not applied to Merck ... I once asked a lawyer about Punitive (as opposed to Actual) damages. He said that it's all in the word ... PUNITIVE = PUNISH ... the point is that the company would be punished for not doing the right thing in the beginning - whether it's expanding the test of a drug or re-engineering an automobile with a defect - which, while costing money in the short term, would still end up costing less than the damages awarded in litigation.

Getting back to Merck, specifically, I think you're absolutely right about the long road ahead for the company ... one analysis I read today was that this was a relatively weak case, and that stronger cases were waiting in the wings ... and that still more cases would be encouraged by today's decision.

I thought life insurance was supposed to cover the theoretical monetary value of one's life.

The most significant effect of this verdict will be fewer pharmaceutical options available to Americans in the future. (and probably more craziness about re-importing drugs from Canada)

Eric - you're right that nothing is 100% safe and effective. When you choose to take a drug, you choose to accept the risks - just as you choose to accept the risks of *not* taking it, if you go that way. It sucks that we're stuck with probabilities instead of certainties. But $229 million won't change that for the next person.

If I die in a car accident, will someone make sure that my family gets a quarter of a billion dollars from Honda, please?

When you choose to take a drug, you choose to accept the risks

Brian, I think the most valid issue to come out of all of this is whether Merck (or any pharmco) adequately communicates what it knows (or thinks it knows) about those risks, so that patients can be properly advised by their physicians. It's one thing to take a risk with a full understanding of the implications of doing so; it's quite another to not have the benefit of full information when making that decision.

I realize I sound like I'm arguing both sides of this case, and, in a way, I am. I don't think Merck is completely innocent (based on what little I know about the case). OTOH, I don't see how judgments in the mind-boggling amount we've just seen help address the underlying issues.

And, of course, the punitive damages are in no way related to the "monetary value of one's life." As Jeff pointed out, they're designed simply to punish the company. I do wonder how hard plaintiff's attorneys would go after such judgments if the punitive damages went to a charity instead of to the plaintiff AND the attorney.

Eric, you raise a good point in that last paragraph. The liability of the pharmaceutical manufacturer is not the only component here ... the "cut" for the plaintiff's attorney is another factor. You'll note that one of the links on my previous post was from an attorney's offive ... one of MANY on the web.

In this particular case, the plaintiffs and their attorney will see nowhere near a tiny fraction of the punitive damages ... the state government has seen to it that there is a cap on punitive damages, no matter how egregious the defendant's actions that prompted the suit. And to hear business associations talk about the makeup of justices at the next two levels of Texas' court system, I don't know how much chance any award will have of surviving appeal.

However, I wonder if an award such as this, in a business-friendly state such as Texas, might offer some standard - not compelling, but pursuasive - for damages sought in other states.

Eric, I have REALLY enjoyed this discussion!

Jeff, Texas might, as a whole, be a "business-friendly state," but it's pretty well known that the southern part of the state is a personal injury lawyer's paradise, for precisely this kind of judgment.

I had also forgotten about the cap on punitive damages in Texas. I'm surprised that's not getting more play, but perhaps I've just missed it.

Anyway, I just emailed you a new article from the Wall Street Journal in which several stock analysts give their opinions about the impact this judgment may or may not have on other pending Vioxx cases.