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.

Facts

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.

Appeal

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.

Conclusion

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions