Australia: Federal Court allows Vioxx appeal

Insurance Update March 2012
Last Updated: 3 April 2012
Article by Toby Biddle

On 12 October 2011, the Full Court of the Federal Court delivered its judgment in the appeal of the representative (class) action brought on behalf of certain consumers of the arthritic drug, Vioxx. Vioxx was alleged to have caused adverse cardiovascular side-effects in several arthritis patients. The Full Court allowed the appeal against the earlier damages award against the supplier of Vioxx.


Vioxx is an anti-inflammatory drug prescribed to treat the effects of arthritis. It was manufactured by a US company, Merck & Co Inc, and distributed by its Australian subsidiary, Merck Sharpe and Dohme (Australia) Pty Limited (MSDA) (collectively Merck). The drug was marketed on the basis that, unlike most anti-inflammatories on the market, it did not carry with it gastrointestinal side effects.

In late May 1999, Vioxx was approved by the United States Food and Drug Administration and was registered on the Australian Register of Therapeutic Goods in mid-January 2000.

In early 2000, the results from a clinical trial known as the VIGOR Trial were revealed. The trial suggested that the rate of serious cardiovascular complications was significantly lower in patients receiving an alternative medication to Vioxx.

In mid-October 2000, Merck provided the USFDA with a safety update report on Vioxx, taking into account the cardiovascular test results from the VIGOR Trial. The product information for Vioxx was subsequently amended on a number of occasions with the Australian Register of Therapeutic Goods, but Vioxx remained on sale.

In September 2004, the results of a further clinical trial (the APPROVE Trial) which had commenced in early 2000 were released. The results of the trial suggested that the rate of cardiovascular adverse events amongst patients taking Vioxx was approximately double that of patients taking a placebo.

Shortly afterwards, Merck voluntarily withdrew Vioxx from the market.

Graham Peterson had commenced taking Vioxx in May 2001. It was prescribed by Dr John Dickman for back pain attributed to osteoarthritis.

Mr Peterson suffered a heart attack in December 2003 but continued to take Vioxx until its withdrawal from the market in late 2004.

Mr Peterson initially commenced proceedings in the Supreme Court of Victoria, but the proceedings were transferred to the Federal Court in 2006 as a representative action on behalf of all patients who had been prescribed Vioxx after 1999 and had suffered from myocardial infarction, thrombotic stroke, unstable angina, transient ischaemic attack, or peripheral vascular disease.

First instance judgment

A trial took place before Jessup J of the Federal Court. In the trial, Mr Peterson alleged causes of action against Merck in negligence and under the Trade Practices Act 1974 (TPA).

In the negligence action, Mr Peterson alleged that the Merck entities failed to conduct sufficient research into the side effects of Vioxx, failed to adequately consider the outcome of clinical trials (in particular the VIGOR trial) and failed to provide adequate warnings concerning the potential adverse side-effects of Vioxx. For the first 2 allegations, Jessup J found that Merck's research and consideration of the VIGOR trial was in fact adequate. However, he found that Merck was negligent in failing to take adequate steps to inform Mr Peterson's doctor of the results of the VIGOR trial, finding that changes to the product information and other steps undertaken by Merck were insufficient.

Despite this, Mr Peterson's claim in negligence failed on causation, his Honour finding on the evidence that even if Merck had taken adequate steps, Dr Dickman would still have prescribed Vioxx and Mr Peterson would have taken it.

In Mr Peterson's claim under section 52 of the TPA, Jessup J found that Merck was guilty of misleading conduct through its sales representatives conveying a broad message of safety in relation to Vioxx, in circumstances where the VIGOR trial had suggested otherwise. Again, however, the action failed on causation, as Jessup J found that Dr Dickman would still have prescribed Vioxx, and Mr Peterson would have taken it, had the misleading conduct not occurred.

Mr Peterson also brought a claim pursuant to the defective good provisions in section 75AD of the TPA on the basis that the safety of Vioxx was not such as persons were generally entitled to expect. Jessup J found that Vioxx was indeed defective within the meaning of section 75AD. Again, however, the cause of action failed, this time on the basis of the "state of the art defence" in section 75AK of the TPA. Jessup J found that it was not until the results of the APPROVE trial were available that the state of scientific knowledge was sufficient to enable the defect to be discovered.

However, Mr Peterson was successful in his action against MSDA under the fitness for purpose (section 74B) and merchantable quality (section 74D) provisions of the TPA. Jessup J found that Vioxx was not fit for the purpose made known by implication by Mr Peterson (treatment of arthritis), nor was it of merchantable quality, having regard to the cardiovascular side-effects. Jessup J found that Mr Peterson's heart attack occurred by reason of the Vioxx supplied by MSDA not being fit for purpose or of merchantable quality.


MSDA fought the appeal strongly on the issue of causation. Its arguments on causation were accepted by the Full Court.

The Full Court held that Mr Peterson was obliged to show that his consumption of Vioxx was a necessary condition of his heart attack. In relation to this, the first instance judgment had relied heavily on epidemiological evidence that Vioxx consumption doubled the risk of myocardial infarction.

On this issue, the Full Court found that while it was certainly possible that Vioxx consumption was the cause of Mr Peterson's heart attack, there were several other possible causes, in particular age, gender, hypertension, hyperlipidemia, obesity, left ventricular hypertrophy and a history of smoking.

The Full Court also noted that a small absolute risk may be doubled without making it a likely source of injury – doubling a low absolute risk may produce an absolute risk which still remains low.

Noting this, while careful to state that the finding did not preclude other group members from establishing causation, in the circumstances of Mr Peterson's case the Full Court did not consider that it was more probable than not that the consumption of Vioxx was a necessary condition of the heart attack.

Accordingly, the Full Court found that Mr Peterson could not establish that his heart attack was "by reason of" the consumption of Vioxx (a requirement to establish liability pursuant to both section 74B and section 74D). As to section 74B (fitness for purpose), the Full Court also found that it could not be implied that Mr Peterson had made known that he required a medication with an absence of side effects. The Full Court noted that almost all medications have some side effects.

MSDA also appealed Jessup J's finding of breach of duty (given the potential relevance of this to the claims of other group members). MSDA was also successful in this aspect of the appeal. The Full Court considered that evidence that Dr Dickman had in fact been made aware of the amended TGA product information containing the results of the VIGOR trial, rendered irrelevant any failings by MSDA to make Dr Dickman aware of the results of the trial through other means.


The appeal judgment will be welcomed by manufacturers and suppliers of products, in particular pharmaceutical products.

However, we may not have seen the last of the case. The Full Court was careful to point out that its findings in relation to aspects of Mr Peterson's claim would not necessarily follow in the circumstances of other group members. Lawyers for other group members will now need to carefully consider the individual circumstances of each of their clients to determine whether any case differs from Mr Peterson's in that Vioxx was a necessary condition to the occurrence of the particular adverse cardiovascular event suffered by the group member. The lead applicant's lawyers in the representative action, Slater & Gordon, have indicated that cases of some group members may still be pursued on this basis. However, given the Full Court's comments concerning the use of epidemiological evidence, causation is still likely to be a difficult hurdle for any such group members who choose to continue with their actions.

Slater & Gordon have also indicated that a High Court appeal is being contemplated. The High Court's recent treatment of causation cases (eg. Adeels Palace Pty Limited v Moubarak (2009) 239 CLR 426, Amaca Pty Limited v. Ellis (2010) 240 CLR 11 and Tabet v. Gett (2010) 240 CLR 537) suggests that a successful appeal might be difficult.

Despite the outcome, the Vioxx case illustrates the importance of manufacturers and suppliers of products, in particular pharmaceutical products, being constantly vigilant about not only the adequacy and timeliness of information supplied about their products, but also the adequacy of the means by which that information is supplied. Mere compliance with a regulatory regime concerning registration of products and product information will rarely be sufficient in itself to defend a product liability action.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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