U.S. News

Vioxx Verdict Upheld; Merck Boosts CEO's Salary

CNBC.com with contributions from AP

A judge in the New Jersey Vioxx personal injury trial on Monday rejected a motion that would give one of the plaintiffs in the trial another opportunity to collect damages based on negligence from drug maker Merck.

Meanwhile, Merck reported in a regulatory filing that it is raising CEO Richard C. Clark's base salary.

The Atlantic City jury on Friday ruled that Merck was not negligent in the case of Brian Hermans of Waupaca, Wis., who died at age 44 after a September 2002 heart attack. That meant his family could not collect damages.

However, the jury did find that Merck violated New Jersey's consumer fraud law, so Hermans' family could recoup three times what he paid for Vioxx prescriptions. It also allows Hermans' family lawyer, Mark Lanier, to recoup his legal fees, which he estimates at $2 million.

Late Friday, Lanier asked Superior Court Judge Carol Higbee to overturn the jury's ruling that Merck wasn't negligent in Hermans' case. Lanier argued Hermans had started taking Vioxx before April 2002, when Merck put a stronger warning about the drug's cardiac risks in the detailed package insert, and he hadn't seen his doctor since then. Higbee rejected the motion Monday.

On Tuesday, the jury will begin the second phase of the unusual trial, primarily to determine whether the second plaintiff is entitled to damages. The jury found Friday that Merck was negligent in the case of Frederick "Mike" Humeston, 61, of Boise, Idaho, who survived a heart attack in September 2001, before the stronger warning.
So far, jurors have only heard evidence about Merck's marketing of Vioxx and what it disclosed about increased risks of heart attack and stroke, which led Whitehouse Station, N.J.-based Merck to pull the blockbuster drug from the market in September 2004.

Higbee agreed to the two-phase trial arrangement to try to speed up trials. She is overseeing more than half of the roughly 28,000 Vioxx lawsuits Merck faces.

CEO's Salary Raised

In filings with the Securities and Exchange Commission, Merck said it raising chief executive Richard Clark's base salary to $1.7 million from $1.2 million a year, based on "significant business and leadership contributions and of the base salaries of the chief executives of the company's pharmaceutical peers."

Clark was also granted a 2006 bonus of $1.8 million as part of Merck's executive incentive plan.