The Vioxx Pharmaceutical Scandal: Peterson v. Merke Sharpe & Dohme (Aust) Pty Ltd (2010) 184 Fcr 1

Abstract

In early March 2010, Federal Court Justice Jessup in Peterson v Merke Dohme (Aust) Pty Ltd (2010) 184 FCR 1 ruled that Merke Sharpe Dohme Pty Ltd had produced a defective product contrary to the Trade Practices Act 1974 (Cth), the anti-arthritic drug Vioxx. Promoted as relieving arthritic pain without the side effect of gastric ulceration, the drug also doubled the risk of heart attack in those prescribed it. The court also heard that the manufacturing company had engaged in misleading practices to promote the prescription and usage of Vioxx, including “fake” journals and guidelines to “drug reps” that minimised the adverse cardiovascular risks. The manufacturer had already settled a class action in the United States for more than US$7 billion for those harmed by the drug but this was the first such case to be decided in Australia. The court awarded the applicant, Graeme Peterson, A$300,000 in damages. This column examines this judgment and analyses evidence there presented that Merck may have misled the scientific community, the medical profession and Australia’s drug regulation system to get Vioxx on the market and keep it there. It considers whether the case reveals the need for more rigorous post-marketing surveillance and other changes to Australia’s drug regulatory system, including a replacement of self-regulation in pharmaceutical promotion with a US-style system of rewarded informant-led criminal penalties and civil damages claims.

Keywords: Pharmaceutical regulation, fraud, drug side effects, Vioxx, anti-trust

JEL Classification: L43, L44