The Vioxx Case: An Argument for Better Regulation

The enormous damages award by the jury in the first Vioxx case has provoked a lot of editorial discussion. I have seen a number of arguments that the huge award is unfair, and will have a number of unintended consequences. For example, a commentary in the Boston Globe by two Harvard economists suggested it could raise prices for drugs; discourage development of new drugs; and make drug companies excessively cautious. As a physician, I am have to have some sympathy for these general arguments against large damages awards. However, they fail to acknowledge that what made the jury most upset in this case was not the probablility that the patient was harmed by adverse effects of the drug, but that this was made possible because the company aggressively marketed the drug while it hid its knowledge about the drug's adverse cardiac effects.
A more balanced approach appeared in an editorial in the Philadelphia Inquirer. It characterized the Vioxx case as a regulatory failure. It noted that the US Food and Drug Adminstration (FDA) greatly relaxed its scrutiny of drug companies in response to changes Congress made in the laws in the 1990's. In a more stringent regulatory environment, Merck would have had greater incentives to reveal Vioxx's adverse effects earlier, and not to market the drug as a nearly risk free pain killer for the masses. But in the absence of meaningful FDA scrutiny, and the behavior changes awareness of that scrutiny would have induced, the only way to prevent drug companies from hiding adverse effects, or marketing drugs to patients who don't need to run such risks, is to make them fear huge damage awards. As the Inquirer put it,

As things stood, Carol Ernst had nowhere to go for redress of the harm Vioxx caused her, other than civil court. Thus, the jury's anger on her behalf. They wanted to send a message, and they saw her as David against the Goliath of Goliath's
[But,] if proper regulation had been in place, this lawsuit and award might have been averted.
The balance is tricky but not impossible. The trick is not to allow ideology to rule out reasonable adjustments. Get the balance right, and companies can innovate and make money without recklessly hurting consumers.

Sounds about right to me.
And I think the point is generalizable. Our health care system is now dominated by large organizations, not only pharmaceutical companies, but device manufacturers, information technology companies, hospitals and hospital systems, managed care companies, etc., etc. We have shown on this blog how their leaders all too often misbehave, and act in ways that threaten physicians' professional values, and more importantly, the health and safety of our patients. As long as health care is so dominated by large organizations, our best option for restraining their behavior may be stronger, better, and smarter regulation.