DON'T DO THE MATH.(The Talk of the Town)(Merck and Company Inc.'s Vioxx)

In the business world, bad news is usually good news--for somebody else. Ever since Merck announced, this past fall, that the pain reliever Vioxx could be linked to an increased risk of strokes or heart attacks, ads from lawyers trolling for potential plaintiffs ("Hire a Texas Vioxx lawyer," "Vioxx injury claims") have become ubiquitous on the Internet and cable television. Merck is already defending itself against almost five hundred lawsuits, and the number is expected to soar in the next few months. One Wall Street analyst has estimated that the company could face a total bill of more than fifty billion dollars. The impending parade of jury verdicts and out-of-court settlements may render a kind of rough justice. But you may not realize just how rough.

In recent years, juries have become more willing to punish corporate offenders by issuing immense damage awards. According to the Harvard law professor W. Kip Viscusi, more than half of all "blockbuster awards"--those totalling more than a hundred million dollars--have been decided since 1999. The system that produces these awards is often perplexingly arbitrary. Where a case is tried, for instance, can have an enormous effect on how much a company ends up paying. (Two states, Texas and California, have been responsible for almost half of all blockbuster awards.) Nor is the level of scientific rigor in such cases always high: litigation over silicone breast implants cost Dow Corning $2.3 billion and forced it into bankruptcy even though the implants have never been proved to cause immune disorders, as plaintiffs alleged.

Merck would seem to have one big thing in its favor: the company voluntarily withdrew Vioxx from the market. But while Merck executives may have hoped to persuade people that they were acting responsibly, plaintiffs' attorneys have taken the withdrawal as an admission of guilt. Questions about Vioxx's potential risks have been common since its introduction, six years ago, especially after a 2000 trial suggested that the drug increased the risk of heart disease. Merck did not hide these data, and beginning in 2002 the drug's label included a warning about the possible cardiovascular risks. Some critics, however, have suggested that the company soft-pedalled the dangers. Internal company documents show that Merck employees were debating the safety of the drug for years before the recall.

From a scientific perspective, this is hardly damning. The internal debates about the drug's safety were just that--debates, with different scientists arguing for and against the drug. The simple fact that Vioxx might have risks wasn't reason to recall it, since the drug also had an important benefit: it was less likely to cause the internal bleeding that aspirin and ibuprofen cause, and that kills thousands of people a year. And there's no clear evidence that Merck kept selling Vioxx after it decided that the drug's dangers outweighed its benefits.

While that kind of ...