Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd

[2010] FCA 180

FEDERAL COURT OF AUSTRALIA

Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd [2010] FCA 180

Citation:

Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd [2010] FCA 180

Parties:

GRAEME ROBERT PETERSON v MERCK SHARPE & DOHME (AUSTRALIA) PTY LTD (ACN 000 173 508) and MERCK & CO, INC.

File number:

VID 451 of 2006

Judge:

JESSUP J

Date of judgment:

5 March 2010

Catchwords:

TORTS – Negligence – Product Liability – Prescription medicine for relief of inflammation – Side-effects – Whether medicine caused or contributed to cardiovascular disease – Whether manufacturers knew or ought to have known of that tendency – Whether they owed duty of care to consumers – Content of duty of care – Whether affected by status of product as prescription medicine – State of scientific uncertainty as to side-effects of medicine – Whether manufacturers undertook sufficient research into side‑effects – Whether medicine should have been withdrawn from market pending resolution of scientific issues – Whether manufacturers breached duty of care by not doing so.

TORTS – Negligence – Product Liability – Prescription medicine for relief of inflammation – Side-effects – Clinical trial presenting signal of cardiovascular risk – Whether discharge of duty of care required medicine to be withdrawn from market – Whether doctors, pharmacists, health care professionals and the public should have been warned – Whether they were warned – Terms of warning that would have been sufficient – Whether sufficiently communicated to doctors – Whether amendment to “Product Information” was sufficient – Manufacturer’s sales representatives claiming medicine safe – Whether justified claim – Whether duty of care breached by failing to warn and/or making safety claim.

TORTS – Negligence – Product Liability – Causation – Prescription medicine for relief of inflammation contributing to applicant’s heart attack – Manufacturer negligently failed to warn of risk and represented safety of medicine – Whether applicant would have declined to take medicine if appropriately warned or if no safety claim made – Whether applicant’s doctor would have chosen not to prescribe medicine.

TRADE PRACTICES – Misleading or deceptive conduct – Prescription medicine for relief of inflammation associated with doubling of risk of heart attack – No warning provided to doctors – “Product Information” for medicine not referring to increased risk – Whether misleading or deceptive conduct on part of corporation marketing the medicine – Sales representatives of corporation claiming medicine safe – Whether misleading or deceptive – Medicine contributed to applicant’s heart attack – Whether applicant’s doctor relied on conduct of corporation – Whether he would have prescribed medicine in any event.

TRADE PRACTICES – Defective goods – Prescription medicine for relief of inflammation associated with doubling of risk of heart attack – No warning provided to doctors – Whether safety of medicine not as such persons generally entitled to expect – Whether defect arose only because of compliance with mandatory standard – Whether state of scientific knowledge not such as to enable defect to be discovered.

TRADE PRACTICES – Unsuitable goods – Prescription medicine for relief of inflammation associated with doubling of risk of heart attack – No warning provided to doctors – Whether applicant made purpose of acquiring medicine known to manufacturer – Whether medicine not reasonably fit for that purpose – Whether applicant relied on manufacturer’s skill or judgment.

TRADE PRACTICES – Goods of unmerchantable quality – Prescription medicine for relief of inflammation associated with doubling of risk of heart attack – No warning provided to doctors – Whether medicine not as fit for the purpose for which goods of that kind commonly bought as was reasonable to expect.

Legislation:

Federal Court of Australia Act 1976 (Cth) Pt IVA
Therapeutic Goods Act 1989 (Cth) ss 4, 9D, 20, 23, 25, 28, 29A, 31, 32, 42DL
Trade Practices Act1974 (Cth) ss 4, 4C, 52, 74B, 74D, 75AA, 75AC, 75AD, 75AK, 82

Cases cited:

Bowling v Pfizer, Inc 143 FRD 141 (1992)
Briginshaw v Briginshaw (1938) 60 CLR 336
Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd [2004] FCA 853
Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Donoghue v Stevenson [1932] AC 562
Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317
E v Australian Red Cross Society (1991) 27 FCR 310
E v Australian Red Cross Society (1991) 31 FCR 299
Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130
Frost v Aylesbury Dairy Company Ltd [1905] 1 KB 608
Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540
Grant v Australian Knitting Mills Ltd [1936] AC 85
Holman v Deol [1979] 1 NSWLR 640
Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
R v Small Claims Tribunal; ex parte Gibson [1973] Qd R 490
Rasell v Cavalier Marketing (Australia) Pty Ltd [1991] 2 Qd R 323
Reyes v Wyeth Laboratories 498 F 2d 1264 (1974)
Rogers v Whitaker (1992) 175 CLR 479
Rosenberg v Percival (2001) 205 CLR 434
Ryan v Great Lakes Council [1999] FCA 177
Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262
Sibley v Kais (1967) 118 CLR 424
Thompson v Johnson and Johnson Pty Ltd [1991] 2 VR 449
Vines v Djordjevitch (1955) 91 CLR 512
Wright v Dunlop Rubber Co Ltd (1972) 13 KIR 255
Wyong Shire Council v Shirt (1980) 146 CLR 40

Date of hearing:

30, 31 March 2009
1-2, 6-9, 15-17, 21-24, 28, 29 April 2009
4-8, 11-15, 18-22, 25, 26 May, 2009 and
2, 9, 10-12, 22-25 June 2009

Place:

Melbourne

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

1014

Counsel for the Applicant:

Mr J W K Burnside QC with Mr B F Quinn

Solicitor for the Applicant:

Slater & Gordon

Counsel for the Respondents:

Mr P R Garling SC with Mr G Williams

Solicitor for the Respondents:

Clayton Utz

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 451 of 2006

BETWEEN:

GRAEME ROBERT PETERSON
Applicant

AND:

MERCK SHARPE & DOHME (AUSTRALIA) PTY LTD
(ACN 000 173 508)
First Respondent

MERCK & CO, INC.
Second Respondent

JUDGE:	JESSUP J
DATE OF ORDER:	5 MARCH 2010
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The proceeding be listed for the making of orders on a date to be fixed, not before 6 April 2010.

2.Not less than 7 days before the date so fixed:

(a)the applicant file and serve a minute of the orders proposed by him to reflect the court’s determination of his personal claim;

(b)the second respondent file and serve a minute of the orders proposed by it to reflect the court’s determination of the applicant’s claim in negligence against it;

(c)the parties exchange, and file with the court, minutes of their respective proposals as to the orders which should be made pursuant to the schedule to the order made under s 33ZF of the Federal Court of Australia Act1976 (Cth) on 30 March 2009; and

(d)any party who or which seeks the making of any other order at this stage of the proceeding, including any order as to costs, provide written notice thereof to the other parties.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 451 of 2006

BETWEEN:

GRAEME ROBERT PETERSON
Applicant

AND:

MERCK SHARPE & DOHME (AUSTRALIA) PTY LTD
(ACN 000 173 508)
First Respondent

MERCK & CO, INC.
Second Respondent

JUDGE:	JESSUP J
DATE:	5 MARCH 2010
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

table of contents

Commencing at
part 1 – introduction ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....		[1]
part ii − The story of Vioxx in the USA........ ........ ........ ........ ........ ........ .......		[22]
Some conventions........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....		[22]
Early studies of Vioxx........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[30]
Protocol 023........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[43]
The Board of Scientific Advisers’ Meeting........ ........ ........ ........ ........ ........ ........ ........ ......		[48]
The CV SOP........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....		[56]
The US New Drug Application for Vioxx........ ........ ........ ........ ........ ........ ........ ........ ........		[63]
Dr Oates’ correspondence........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .		[68]
The VIGOR trial........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......		[72]
The preliminary results of VIGOR........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...		[79]
The significance of Protocol 061........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[90]
Notification of VIGOR results to Merck subsidiaries........ ........ ........ ........ ........ ........ ......		[97]
The 14‑day report to the FDA........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[103]
Ongoing consideration of VIGOR results........ ........ ........ ........ ........ ........ ........ ........ ........		[114]
The VIGOR Clinical Study Report........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...		[121]
The Safety Update Report of 13 October 2000........ ........ ........ ........ ........ ........ ........ ........		[131]
The Merck pooled analyses........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[143]
The first pooled analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...		[147]
The Arthritis Advisory Committee meeting........ ........ ........ ........ ........ ........ ........ ........ .....		[151]
The Konstam article........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[158]
The second pooled analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[163]
The FDA warning letter........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....		[168]
The Reicin article........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[170]
Development of a cardiovascular outcomes study........ ........ ........ ........ ........ ........ ........ ...		[172]
The third pooled analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[178]
The Weir article........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........		[184]
The fourth pooled analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........		[186]
Other studies referred to by Dr Reicin........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[189]
Protocol 203........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[191]
The cardiovascular results of APPROVe and the withdrawal of Vioxx........ ........ ........ ..		[193]
part iii − vioxx in australia........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[200]
The statutory and regulatory framework........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[200]
Registration of Vioxx on the ARTG........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .		[211]
Introduction of Vioxx to the Australian Market........ ........ ........ ........ ........ ........ ........ .......		[226]
Amendment to the Vioxx Product Information........ ........ ........ ........ ........ ........ ........ ........		[230]
The Marketing of Vioxx in Australia........ ........ ........ ........ ........ ........ ........ ........ ........ .......		[259]
part iv − vioxx and the risk of cardiovascular disease........ ......		[297]
Introduction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......		[297]
Overview of expert opinion........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[304]
The Bradford Hill criteria........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .		[321]
APPROVe........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .		[327]
The generalisability of the APPROVe results........ ........ ........ ........ ........ ........ ........ ........ ..		[343]
VIGOR and the role of naproxen........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[348]
The Merck arthritis studies........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......		[388]
The Merck Alzheimer’s disease studies........ ........ ........ ........ ........ ........ ........ ........ ........ ...		[400]
VICTOR........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...		[423]
Other meta analyses........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[424]
Other studies........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....		[440]
The mortality data........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....		[442]
The dose relationship........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........		[459]
Consistency of association across studies........ ........ ........ ........ ........ ........ ........ ........ ........ .		[464]
The FitzGerald hypothesis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........		[477]
Other aspects of a biological explanation........ ........ ........ ........ ........ ........ ........ ........ ........ .		[531]
Susceptibility of the atherosclerotic vasculature........ ........ ........ ........ ........ ........ ........ ......		[551]
Other Bradford Hill criteria........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[563]
Other evidence of risk relied upon by the applicant........ ........ ........ ........ ........ ........ ........ .		[565]
Vioxx and the risk of myocardial infarction........ ........ ........ ........ ........ ........ ........ ........ .....		[567]
Vioxx and the risk of thrombotic stroke........ ........ ........ ........ ........ ........ ........ ........ ........ ...		[573]
Vioxx and the risk of the other pleaded cardiovascular conditions........ ........ ........ ........ ..		[584]
part v − what the respondents knew or ought to have known........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[585]
Before the results of VIGOR were available........ ........ ........ ........ ........ ........ ........ ........ ....		[588]
Merck’s interpretation of the VIGOR results........ ........ ........ ........ ........ ........ ........ ........ ...		[593]
From VIGOR to 31 December 2000........ ........ ........ ........ ........ ........ ........ ........ ........ ........		[615]
2001........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[635]
2002........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[663]
2003........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[669]
2004........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[675]
Summary........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...		[679]
part Vi − the applicant’s own circumstances........ ........ ........ ........ ......		[683]
The applicant........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....		[683]
The applicant’s back pain........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .		[695]
Dr Dickman........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[699]
The applicant’s experience with Vioxx........ ........ ........ ........ ........ ........ ........ ........ ........ ....		[727]
Continuity of the applicant’s use of Vioxx........ ........ ........ ........ ........ ........ ........ ........ .......		[742]
The applicant’s heart attack........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[759]
Did Vioxx cause or contribute to the applicant’s heart attack?........ ........ ........ ........ ........		[764]
Consequences of the applicant’s heart attack........ ........ ........ ........ ........ ........ ........ ........ ...		[774]
part vii − the applicant’s case in negligence........ ........ ........ ........ .......		[782]
The existence and content of a duty of care........ ........ ........ ........ ........ ........ ........ ........ .....		[782]
Discharge of the duty of care........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....		[788]
Failure to warn........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[815]
MSDA’s marketing representations........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .		[854]
Causation........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..		[861]
part viii − the applicant’s case under the trade practices act........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[875]
Implied repeal........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...		[875]
Section 52........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .		[882]
Section 75AD........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....		[912]
Section 74B........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......		[931]
Section 74D........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......		[969]
Compensation........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...		[985]

Part i − introduction

1. This proceeding, which was transferred to the court pursuant to an order made by the Supreme Court of Victoria on 10 April 2006, is a representative one under Pt IVA of the Federal Court of Australia Act1976 (Cth) (“the Federal Court Act”). The second respondent, Merck and Co, Inc. (“Merck”), is a corporation based in the United States of America engaged in the development, manufacture, distribution and sale of pharmaceutical products both in that country and, through its international subsidiaries, in many parts of the world, including Australia. The first respondent, Merck Sharpe & Dohme Australia Pty Ltd (“MSDA”) is one of those subsidiaries.

2. In the 1990s, scientists employed by Merck at Merck Research Laboratories (“MRL”) developed a new non‑steroidal anti‑inflammatory drug which came to be called “rofecoxib”.  It was to be used in the treatment of arthritis, and was a member of a new class of drugs then being developed by a number of pharmaceutical companies which were said to provide relief from the inflammation and pain associated with arthritis without gastrointestinal side‑effects.  In due course, Merck manufactured rofecoxib on a commercial scale and incorporated it into a new pharmaceutical product marketed as “Vioxx”.  So far as the Australian situation was concerned, Merck supplied rofecoxib to MSDA, which manufactured the medicine which was marketed in this country.

3. Vioxx was first registered on the Australian Register of Therapeutic Goods (“the ARTG”) on 17 January 2000.  From at least February 2001, MSDA distributed and sold Vioxx in Australia until it was removed from the market on 30 September 2004.  The events which are controversial in this proceeding relate directly to the circumstances which gave rise to the world‑wide withdrawal of Vioxx on that date.

4. The applicant, Graham Robert Peterson, had suffered from back pain for many years when he was first prescribed Vioxx by his doctor, Dr John Dickman, on 10 May 2001.  He found that Vioxx provided relief from pain without the adverse gastrointestinal side-effects which he had encountered with other drugs.  He continued to take Vioxx regularly until it was withdrawn from the market.  In December 2003, he had a serious heart attack, received prompt, and, it seems, effective, medical treatment, and made an uncomplicated recovery.  At the time, it occurred neither to him nor to Dr Dickman that the heart attack was related to the consumption of Vioxx.  But the withdrawal of Vioxx from the market in September 2004 – because of the occurrence of adverse cardiovascular experiences in a major clinical trial – gave the applicant cause to make that connection.  In this proceeding, he alleges that the consumption of Vioxx caused or contributed to his heart attack, and that the respondents failed to discharge their duty of care to him in relevant respects.  He also makes certain allegations against MSDA under the Trade Practices Act1974 (Cth) (“the Trade Practices Act”), to which I shall come. He makes the same allegations on behalf of the other members of the group constituted under Pt IVA of the Federal Court Act.

5. The proceeding is concerned with the operation in vivo of a bifunctional enzyme which is ubiquitous in human cells, prostaglandin H₂ synthase, also called cyclooxygenase (commonly, and hereinafter, abbreviated as “COX”).  By its cyclooxygenase activity, the enzyme catalyses the conversion of arachidonic acid to prostaglandin G₂ (PGG₂), and then by its peroxidise activity, the enzyme catalyses the conversion of PGG₂ to prostaglandin H₂ (PGH₂).  Other enzymes then convert PGH₂ to eicosanoids, 20‑carbon molecules with functions described in the 5^th edition of Lehninger:  Principles of Biochemistry (2008), by DL Nelson and MM Cox, at p 358, as follows:

   Eicosanoids are paracrine hormones, substances that act only on cells near the point of hormone synthesis instead of being transported in the blood to act on cells in other tissues or organs.  These fatty acid derivatives have a variety of dramatic effects on vertebrate tissues.  They are involved in reproductive function; in the inflammation, fever and pain associated with injury or disease; in the formation of blood clots and the regulation of blood pressure; in gastric acid secretion; and in various other processes important in human health or disease … There are three classes of eicosanoids: prostaglandins, thromboxanes, and leukotrienes.

   We are presently concerned only with the first and second classes of eicosanoids mentioned above:  prostaglandins and thromboxanes.

6. There are three features of these biological processes that assume particular importance in the present case.  First, although COX is ubiquitous, and although the sequence by which eicosanoids are derived from arachidonic acid is the same in all cells, the resulting hormones differ as between cell types.  In the words of Prof Cleland, a rheumatologist called by the applicant:  “While COX is ubiquitous, tissues vary in expression of terminal synthases …”  Secondly, as stated in the extract from Lehninger, the eicosanoids “act only on cells near the point of hormone synthesis”.  And thirdly, depending on location in the body, the action of COX may be constitutive (that is, operating all the time) or inducible (that is, operating only in response to particular stimuli).

7. Our present concern involves the functions of eicosanoids in three distinct parts of the body:  the sites of arthritic joints, the stomach and upper duodenum, and the vasculature.  In the vicinity of arthritic joints, COX is induced by the pathological state of the joint, but, in a situation in which the condition is chronic, the action of the enzyme is effectively continuous.  The eicosanoids produced in this situation are the prostaglandins:  most conspicuously prostaglandin E₂ (PGE₂), but also possibly, it seems, prostaglandin I₂ (PGI₂ – also known, and to which I shall refer, as prostacyclin).  They are responsible for the inflammation which is the cause of much of the pain and inconvenience of arthritis.  In the stomach and upper duodenum, COX operates constitutively to produce PGE₂ (and possibly also prostacyclin) which contribute to the protection of the mucosal lining.  In the words of Prof Yeomans, a gastroenterologist called by the respondents, the prostaglandins are “one of the important defence factors that help the stomach and duodenum resist being digested by their own corrosive, acid juice”.  In the vasculature, COX operates at two levels which are presently relevant:  in blood platelets, it is involved in the production of thromboxane A₂ (TXA₂ – to which I shall refer as thromboxane), a clotting and vaso‑constricting agent; and in the endothelium of blood vessels, it is involved in the production of prostacyclin, in that context an anti‑coagulant (by binding to a receptor on the surface of, and thereby rendering inactive, platelets that would otherwise tend to coagulate) and vaso‑dilating agent.

8. For many years non‑steroidal anti‑inflammatory drugs (“NSAIDs”) (including aspirin) have been used in the mitigation of the inflammation associated with arthritis.  In 1971 it was discovered that the inhibition of the operation of COX was responsible for the analgesic and anti‑inflammatory effects of aspirin and other NSAIDs.  This also provided an explanation for the gastrointestinal side-effects that were associated with the ingestion of NSAIDs:  if the operation of COX were inhibited, the beneficial effect of the prostaglandins in the stomach and duodenum would likewise be compromised.  Then in 1990 it was discovered that there were in fact two isoforms of COX, one which was constitutive, which came to be called COX-1, and another which was inducible, which came to be called COX-2.  (It seems that, in the kidney and the brain only, COX-2 is to an extent constitutive, but otherwise the foregoing generalisation will be sufficient for present purposes.)  It was discovered that the form which played a role in the stomach and duodenum was COX‑1, while the form which was involved in the inflammatory process in the joints was COX-2.  This led to sustained efforts to develop compounds that would inhibit the operation of COX-2 only, leaving COX-1 untouched to continue its beneficial work in the gut.  Before long, such compounds were developed, first in the form of a molecule called “celecoxib” which later became the active ingredient in a drug marketed as “Celebrex”, and shortly thereafter in the form of a molecule called “rofecoxib” which later became the active ingredient in Vioxx.  These and other molecules which inhibit only COX-2 are referred to as COX‑2 inhibitors, or simply as “coxibs”.

9. The controversy in the present case centres around the effect which the consumption of coxibs, and of Vioxx in particular, has in the context of the vasculature.  The applicant’s case relies on the circumstance that in platelets the production of thromboxane is the work of COX-1 (which is uncontroversial), while in the endothelium the production of prostacyclin is the work of COX-2 (which is not uncontroversial, but the applicant so alleges).  He therefore contends, in short, that, unlike the traditional NSAIDs which act indiscriminately, Vioxx blocks only the production of endothelial prostacyclin in blood vessels, while leaving the production of platelet thromboxane unaffected.  Without the mitigating effect of prostacyclin, it might be expected that the aggregation of platelets and the consequent clotting of the blood will proceed unrestrained, with thrombotic and/or thromboembolic consequences.  The applicant contends that this is exactly what happened to him in December 2003, when he had his heart attack.

10. That brings me to the applicant’s case in court.  The group members to whom the proceeding relates are identified in para 2 of the Further Amended Statement of Claim (“the Statement of Claim”) as follows. 

    The group members to whom this proceeding relates … are all persons who:

    (a)after 30 June 1999 obtained from a medical practitioner in Australia one or more prescriptions of the non‑steroidal anti‑inflammatory drug rofecoxib sold as tablets under the trade mark or brand “Vioxx” … as pleaded in paragraph 6 herein; and

    (b)after 30 June 1999 completed one or more prescriptions of Vioxx tablets purchased in Australia as pleaded in paragraph 7 herein; and

    (c)at any time after completing their first prescription of Vioxx tablets purchased in Australia but before the day 30 weeks after last consuming a Vioxx tablet, suffered and were diagnosed as having suffered one or more of the following conditions:

    (i)        myocardial infarction;

    (ii)       thrombotic stroke;

    (iii)      unstable angina;

    (iv)      transient ischaemic attack;

    (v)       peripheral vascular disease; …

    I shall refer to these conditions as “the pleaded cardiovascular conditions”. 

11. It is alleged that, after 30 June 1999, each of the group members obtained from a medical practitioner in Australia one or more prescriptions of Vioxx, and subsequently “completed” those prescriptions by taking Vioxx tablets purchased in Australia.  It is alleged that, after completing his or her first prescription of Vioxx tablets, but before the end of the 30^th week after last consuming a Vioxx tablet, each of the group members suffered one or more of the pleaded cardiovascular conditions.  In the case of the applicant, it is alleged, and it is common ground, that he suffered a myocardial infarction on 8 December 2003.  It is alleged that each pleaded cardiovascular condition suffered by each group member was caused by his or her consumption of Vioxx tablets, and that he or she experienced pain or suffering, and suffered loss and damage, as a consequence.

12. The applicant’s cause of action against Merck, and a significant cause of action against MSDA, sounds in negligence.  He alleges that the consumption of rofecoxib “materially increased the risk” of suffering the pleaded cardiovascular conditions.  He alleges that the respondents “knew or ought to have known” of that circumstance.  He alleges that the respondents owed to each of the group members a duty to take reasonable care to avoid acts and omissions that may have exposed them to a material increase in the risk of suffering the pleaded cardiovascular conditions as a consequence of consuming Vioxx tablets.  He alleges that the respondents failed to undertake the necessary research, or to have regard to the results of their research, as to the side‑effects and health risks associated with Vioxx, that they continued to market Vioxx rather than awaiting the results of such research as was being undertaken and, in the case of MSDA, that it failed to inquire of Merck about the possible side‑effects and health risks, and manufactured Vioxx from rofecoxib rather than from some other drug. 

13. The applicant alleges against MSDA that it failed to warn medical practitioners, pharmacists, other health care professionals and consumers of the risks said to be associated with the consumption of Vioxx.  He says that such warnings ought to have been given in various places and by various means, to which I shall turn.  In these respects, he adds an allegation that Merck too failed to warn. 

14. The applicant alleges that the respondents failed until 30 September 2004 to withdraw or to recall Vioxx tablets from the market.  These allegations are denied by the respondents, although it is common ground that they did not withdraw or recall Vioxx tablets until 30 September 2004.

15. The applicant also advances a case of commission against MSDA, alleging that it undertook a sophisticated marketing campaign for Vioxx, by which the overall safety of the drug was emphasised in written and oral communications with medical practitioners and others, and by which such evidence as there was of the cardiovascular risks associated with the consumption of Vioxx was de‑emphasised at best, and often either wilfully or carelessly misrepresented. These allegations are used by the applicant both in his negligence case (in the sense that, notwithstanding the cardiovascular risk said to be associated with the consumption of Vioxx, and the absence of adequate research or investigation to resolve that risk, MSDA deployed these representations with a view to securing the greater use of Vioxx in Australia) and in his case under the Trade Practices Act, in respects to which I shall turn in due course.

16. By reason of the matters to which I have referred, the applicant alleges that the respondents failed to take reasonable care to avoid acts and omissions that may expose the group members to a material increase in the risk of suffering the pleaded cardiovascular conditions as a consequence of consuming Vioxx tablets.  In the case of Merck, this breach of duty is alleged to relate to the manufacture, and supply to MSDA, of rofecoxib.  In the case of MSDA, the breach of duty is alleged to relate to its manufacture, packaging, labelling, marketing, distribution and supply for sale of Vioxx tablets.  In each case, it is said that the breach of duty caused each of the group members to be prescribed Vioxx, to complete one or more prescriptions of Vioxx tablets, to suffer one or more of the pleaded cardiovascular conditions, to experience pain and suffering, and to suffer loss and damage. 

17. The applicant also proceeds against MSDA under ss 52, 75AD, 74B and 74D of the Trade Practices Act. He alleges that MSDA’s failure to provide any adequate information, advice or warning to the effect that the consumption of rofecoxib or Vioxx tablets materially increased the risk of suffering the pleaded cardiovascular conditions was conduct which occurred in trade and commerce, and was misleading or deceptive, or likely to mislead or deceive, in contravention of s 52. The applicant relies also on the representations to which I have referred to in para 15 above, alleging that those representations were misleading or deceptive, or likely to mislead or deceive, because the consumption of rofecoxib or Vioxx tablets materially increased the risk of suffering the pleaded cardiovascular conditions, and because Vioxx was not safer in that respect than comparable drugs. Under s 75AD, the applicant says that Vioxx tablets were goods manufactured by MSDA, that the goods had a defect and that the group members suffered injuries because of the defect. To establish that Vioxx tablets had a “defect” in the relevant sense, the applicant invokes s 75AC, alleging that the safety of Vioxx tablets was not such as persons generally were entitled to expect. Under s 74B, the applicant alleges that Vioxx tablets were not reasonably fit for the purpose for which they were, expressly or by implication, acquired by consumers, that they were supplied by MSDA as manufacturer to medical practitioners and pharmacists in trade and commerce, and that such persons acquired the goods for the purpose of re‑supply to consumers, including the group members. The applicant makes like allegations that Vioxx tablets were not of merchantable quality, and thus supplied by MSDA in contravention of s 74D.

18. There was virtually no aspect of the applicant’s case with which the respondents did not join issue.  They deny that the consumption of Vioxx increased the risk of occurrence of any of the pleaded cardiovascular conditions.  They say that the withdrawal of Vioxx from the market in September 2004 was a prudent and cautious expedient which in no sense implied that the consumption of Vioxx was harmful.  Alternatively, they say that, at all times until then, they carefully and conscientiously monitored the emerging science as to the possibility of a causal link between rofecoxib and cardiovascular disease, and that, until September 2004, the existence of such a link was not reasonably apparent to them.  They say that they did carry out reasonable research and investigations in this regard.  They resist the proposition that they failed to advise doctors and others of such information about the possible link between rofecoxib and cardiovascular disease as was actually or constructively known to them.  MSDA says that, by including what it knew (at various stages) about that subject in the “Product Information” maintained in connection with the registration of Vioxx on the ARTG, it took such reasonable steps as were required of it in this regard.  It says that, because Vioxx was a prescription‑only medicine, it discharged its duty of care by addressing such advices, warnings and the like as were necessary from time to time to doctors, and that it was not necessary for it to have done so directly to patients, or to the public generally.  MSDA says that the marketing campaign on which the applicant relies was, as a matter of policy and strategy, entirely internal to itself, and that the only facts which would assist the applicant, in any aspect of his case, were proven communications made to persons external to MSDA which had the potential to affect the prescribing decisions of doctors.

19. The respondents also rely on a number of specific defences – both at common law and under the Trade Practices Act – upon which it is not necessary to elaborate at this stage. Their Defence travelled a good deal further in this respect than their submissions in the case. To the extent necessary, I shall deal with the respondents’ defences as the context requires in my reasons below.

20. The circumstance that the present proceeding is a representative one under Pt IVA has made it necessary to deal with more issues than presently arise in the resolution of the applicant’s personal case.  In due course the resolution of those issues will be linked with the claims of other group members as the applicant brings them forward.  The extent to which I am presently obliged to determine those issues was the subject of an order made on 30 March 2009, a copy of which follows these reasons as Appendix A.  That order was ultimately made by consent, but that it was made at all was the result of contested proceedings and of a judgment of the Full Court given on 11 March 2009:  Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2009] FCAFC 26. At the conclusion of the trial, counsel for both parties proposed that I should leave the precise formulation of the terms in which answers might be given to the questions referred to in the order until they and their clients had had the opportunity to consider my reasons. I shall follow that course.

1. In these reasons, I propose to commence by tracing the development of Vioxx in the United States of America. It will be necessary to refer in some detail to the trials and studies of, or which were relevant to, Vioxx, including those on which the parties rely to implicate Vioxx in, or to exculpate it from, a causal involvement in the onset of thrombotic cardiovascular disease. The introduction of Vioxx into Australia, and the interactions between MSDA and the relevant regulator in that respect, will then be examined. I shall then consider whether Vioxx did, as an objective fact, have a tendency to give rise to cardiovascular conditions. If it did, it will then be necessary to consider whether, at some point before Vioxx was withdrawn in September 2004, the respondents knew or ought to have known of that tendency. I shall then consider the facts relating to the applicant himself, including the question whether Vioxx caused or contributed to his heart attack. From there I shall move to the applicant’s causes of action in negligence and under the Trade Practices Act. Although dealt with in the setting of the applicant’s own case, those parts of my reasons will necessarily include a number of determinations and findings of relevance to the group members as a whole, which will, therefore, be reflected in the answers which I shall, in due course, provide to at least a number of the questions set out in Appendix A.

   part ii − The story of Vioxx in the USA

   Some conventions

2. Before turning to the story of Vioxx as such, I should lay down certain conventional foundations for much of the discussion which will follow.  First, it will be necessary to refer to many published articles in the scientific and medical literature.  In order to avoid burdening these reasons with lengthy and often repetitive full citations, I have listed the articles to which I shall refer in Appendix B.  In my reasons as such, I shall refer only to the name of the first‑mentioned author, followed by the year of publication, as, for example, Konstam (2001).

3. Secondly, as will become apparent, Vioxx and other like medicines were the subject of many trials and studies, both general and specific.  It will be useful at this stage to identify the four main types of investigation that are employed by drug companies and medical researchers.  For the most part, what follows is taken from the evidence of Dr Alise Reicin, a Vice President of Research and Early Development at MRL, although I have supplemented that with the understanding I have derived from the evidence in the case generally.  Dr Reicin said that a clinical pharmacology study was one in which –

   … you actually look at how the drug is absorbed or metabolised, the pharmacokinetics of the drug or its specific effects on enzymes or specific end products in the body. You want to look at very specific questions about how your drug affects specific products in the body.

   Such a study is often a rather small one, in which the pharmacological effect of the drug is studied in a sample of volunteers, either healthy or, on occasions, selected for a characteristic of interest (such as a particular medical condition). 

4. An observational study is usually, though not invariably, a retrospective study making use of a database of patients and their conditions.  Dr Reicin agreed that it was in the nature of an ex post facto systematic examination of clinical or pathological outcomes in a range of cases which had happened in real life.  Of such a study, she said:

   So you will go into a hospital database and you will say, “Okay, how many patients had heart attacks?”  Then you will say, “Of those patients who had heart attacks and those patients who didn’t have heart attacks what percentage were on this drug versus what percentage were on that drug?” and you will try and make observations and conclusions as to whether the percentage on X drug was higher in patients who had the event versus those who did not … The level of certainty around that observation is much less than what you would get in a randomised clinical trial.

5. The trial last referred to in the passage above is that which is regarded by the researchers as the “gold standard” of clinical trials: the prospective, randomised, double‑blind, placebo‑controlled or comparator‑controlled trial.  In these reasons, I shall abbreviate this to randomised clinical trial (“RCT”).  Such a trial is an “outcomes‑based” one because it proceeds by way of the enrolment of a number (ideally a large number) of patients, randomizes them to the drug or to the comparator in separate arms or groups, and records the clinical outcomes which they encounter over the study period (which may be the period of the trial as a whole, or it may be a predetermined time for which each patient should take his or her study therapy).  Typically patients are enrolled for such a trial with the co‑operation of their own treating practitioners, who then report to the administrators of the trial what clinical outcomes the patients have encountered as required.  The practitioners are, in such a role, referred to as “investigators”.

6. Finally (for present purposes) there is the meta‑analysis, or pooled analysis.  This is an analysis of the results of other trials or studies, and may be either retrospective (the more common form) or prospective (as in the case of an important study in the history of Vioxx).  Here there have been, or there will be, a number of other trials and studies, each with its own purposes, but more statistically useful information as to a particular outcome or condition may be derived by pooling the results of them.  As I observed in a number of such instances dealt with in the evidence, a meta‑analysis may be valuable where the event of interest was not the primary outcome studied in the underlying trials and where, because of the small numbers of occurrences, the data from those trials do not, separately, sustain a meaningful conclusion as to association.  In such cases, pooling the trial results may give the biostatistician the required numbers to take that extra step.

7. Thirdly, in what follows there will be repeated references to a concept known as the “relative risk”.  A commonly used convention for the expression of the risk of the occurrence of a particular adverse event resulting from taking a medication of interest is to express the risk per 100 patient‑years in the trial or study concerned.  For example, if there were 5000 patients in one arm of a trial, and they all remained in the trial for 18 months, the total patient-years would be 7500.  If there were 50 adverse events in that arm, the risk would be represented as 50/(7500/100) = 0.67.  One then comes to the concept of “relative risk”, which is the risk in one arm of the trial compared to the risk in the other.  Reduced to its simplest essentials, in the example given, if the risk in the second arm were, say, 1.45, the relative risk of taking the medication in that arm would be 1.45/0.67 = 2.16.  That figure, however, represents only the relative risk as between the actual recorded experiences in the trial.  The real‑world relative risk of taking the second medication rather than the first is a matter of statistical estimation, based upon the size and other characteristics of the sample used in the trial.  Here, by convention, statisticians identify a range, or interval, within which the true relative risk would be found 95 times out of 100 (ie it is the interval within which the relative risk would be found 95 times if the same study were conducted 100 times). 

8. The single figure derived in the way explained above is, also by convention, generally stated, but this is no more than what has been described as the “point estimate”.  The theoretical point at which there is no difference between the risks of taking the two medications is unity.  If the 95% confidence interval straddles 1, one could not say, with this measure of confidence, that the risk of taking one medication is greater (or less) than the risk of taking the other.  One could not say, by this conventional measure, that the difference in risk between the two medications was significant.  Thus, although the point estimate of 2.16 in the example given above may appear to suggest that the risk of taking one medication is more than twice as great as that of taking the other, if the 95% interval were, say, 0.85 – 4.45, the statistician would not conclude that the difference was significant by reference to the convention to which I have referred.  In the reasons which follow, I shall use the following conventional format for the expression of relative risk, and the 95% confidence intervals associated with that (taking by way of example the numbers used above):  2.16 (0.85, 4.45).

9. The other statistical concept often referred to in the evidence is the “p‑value”.  As explained by one of the biostatisticians called by the applicant, Prof Woodward, this is a measure of the probability of being wrong in the rejection of a null hypothesis.  In the context of relative risk, the null hypothesis conventionally used is that there is no difference between the two treatments (for instance) being compared.  Put another way, the null hypothesis is that the relative risk of taking one treatment rather than the other is unity.  Thus, although the 95% confidence interval of the relative risk in a particular case may be, say, 1.20 – 3.75, if the p-value were, say 0.01, one would conclude that the probability of the real relative risk being 1 (the null hypothesis which is presumptively rejected) would be 1 in 100.  The p‑value thus provides additional information in cases in which the 95% confidence interval for the relative risk lies wholly above or wholly below unity.  As I understand it, the p‑value may also provide information in cases in which there is no statistically significant difference at the 95% level.  By definition, the probability of a rejection of the null hypothesis being wrong will always be greater than 0.05, but it may sometimes be of interest to know by how much it is greater.

   Early studies of Vioxx

10. The development of Vioxx at MRL, and the clinical trials conducted in that context, were the subject of the evidence of Dr Reicin.  She joined Merck in 1996 as an Associate Director in the Pulmonary/Immunology department of MRL, and, in early 1997, began to work on Vioxx.  She was first involved in the clinical tests of Vioxx that would form the basis of Merck’s submission to the Food and Drug Administration (“the FDA”) for the purpose of the approval of Vioxx for prescription use in the United States. She subsequently worked extensively on Vioxx until after its voluntary withdrawal in September 2004. 

11. Dr Reicin said that, in the United States, the FDA is the government agency that exclusively regulates the approval and marketing of new medicines.  She said that prescription drugs go through a series of rigorous scientific tests and trials before they can be approved and marketed, including pre‑clinical trials (such as animal trials) and clinical (ie human) trials.  During the pre‑clinical phase, new drugs are evaluated first in vitro, and are then tested in animals to determine whether they may be safely given to human subjects.

12. Before a new drug is tested in humans in the United States, a drug sponsor must submit an Investigational New Drug Application to the FDA.  Such an application contains extensive information on the manufacture of the drug, as well as the data from pre‑clinical and other studies.  Based on the information submitted in it, the FDA reviews the proposed protocols for trials in humans, and decides whether to allow those trials to proceed.

13. A new drug must undergo three phases of clinical trials before it is eligible for marketing approval in the United States.  Phase I clinical trials involve the administration of the drug to a small number of healthy volunteers to test the drug’s safety and tolerability, its metabolic and pharmacologic actions, and the pharmacokinetics associated with increasing doses.  Phase II clinical trials are designed to establish the effectiveness of the drug in the intended patient population, and to explore the appropriate dose range for the drug.  Phase III clinical trials gather additional information about a drug’s safety, effectiveness, and dosage. They are generally the largest and longest‑term studies, and are often planned and conducted in consultation with the FDA.

14. When a sponsor believes that it has sufficient data to demonstrate that the drug is safe and effective if used as intended, the sponsor submits to the FDA a New Drug Application containing the data gathered during the pre‑clinical and clinical trials.  That application also contains the sponsor’s proposed labelling for the drug.  It contains all known information regarding the drug, including a summary of the efficacy and safety data, and integrated assessments of benefit and risk.  On the basis of that application, the FDA will determine whether the drug is safe and effective, and also rule on the content, placement and language of the drug’s labelling.

15. Dr Reicin said that the drug that was to become Vioxx went through the stages referred to above.  It was studied in test tubes and animals to examine its pharmacological properties, its efficacy, and its safety.  Merck submitted the Investigational New Drug Application to the FDA on 16 December 1994.  In the Phase I clinical trials, the effects of single oral doses ranging from 5 mg to 1000 mg in young healthy male volunteers were studied.  Next, the effects of oral doses ranging from 25 mg to 375 mg over a two‑week period were studied.  Studies were also undertaken with healthy older people, using doses up to 250 mg.  Then in the Phase II clinical trials, the drug was tested to assess its efficacy in the intended populations – patients with chronic and acute pain.  Specifically, the Phase II studies included two patient populations: patients with pain following dental surgery and patients with pain associated with osteoarthritis.  Merck also studied the efficacy of the drug for patients with rheumatoid arthritis.  All these studies showed that the drug was effective at relieving the pain and inflammation associated with the conditions mentioned.   The Phase III clinical trials, which were planned in consultation with the FDA, were designed to assess whether the drug treated pain as well as existing drugs, but with a reduced incidence of gastrointestinal problems.

16. Although not mentioned in terms by Dr Reicin, there are aspects of clinical trials of which I was informed by counsel for the respondents in opening, and which appear to be uncontroversial.  The Phase II trials are divided into two categories – IIa and IIb.  Only the latter have played any part in the evidence in this proceeding.  I was told that Phase IIa trials were concerned with the appropriate dose ranges for a drug: they do not need to be further mentioned.  It was the Phase IIb efficacy trials of Vioxx that featured significantly in the evidence.  I was also informed by counsel for the respondent that trials conducted after a drug is on the market are referred to as Phase IV trials, and that trials used to explore the prospect of a new indication are sometimes referred to as Phase V.

17. As part of the clinical development program for its new drug, Merck also conducted endoscopy studies, with a view to assessing, by endoscopic inspection, the occurrence of gastrointestinal mucosal damage or ulcers in patients taking the drug or a comparator.  Those studies showed that the new drug, even when administered at very high doses, was associated with less gastroduodenal damage than was observed in subjects taking comparator NSAIDs.  These results were consistent with the theoretical, and expected, action of a coxib, namely, that it had comparable efficacy to other NSAIDs in the relief of pain and inflammation, but was associated with lower levels of endoscopically visible gastrointestinal damage.

18. Dr Reicin said that, in the endoscopy studies just referred to, the majority of the ulcers observed were asymptomatic.  She said that, in order to determine whether the reduction in asymptomatic ulcers would translate into a reduced incidence of the serious and potentially fatal gastrointestinal perforations, ulcers, and bleeds, it was necessary to examine the rates of these outcomes in clinical trials.  Here a number of difficult methodological questions had to be resolved. Among them was the question whether to include patients who had been prescribed low‑dose aspirin by their doctors to prevent heart attacks.  The reason why aspirin is such a widely‑used medication for the avoidance of thromboembolic events is its unique effect upon platelet COX-1.  Aspirin irreversibly acetylates COX-1, thereby rendering the platelet inactive for the term of its life (approximately four days).  The effect of other NSAIDs upon COX-1 is reversible (a subject to which I shall return).  The problem with including patients who were taking aspirin in any proposed clinical trial was that the inhibition of COX-1 by aspirin could lead to the very gastrointestinal outcomes that MRL was trying to test.  That is to say, by allowing the use of aspirin in the study, MRL would have compromised the integrity of its attempt to test the hypothesis that the new drug would be associated with fewer gastrointestinal bleeds, for example, than a non‑selective NSAID that inhibited both COX-1 and COX-2.

19. On the other hand, according to Dr Reicin, there were also good reasons for including patients who were taking low‑dose aspirin in the study.  One was the reality that, in the real world, many people did take low‑dose aspirin.  Another reason was based on the expectation that the comparator group would have a traditional NSAID administered to them.  Dr Reicin was aware that such NSAIDs, because of their inhibition of COX-1, had anti‑clotting effects, at least to an extent, like aspirin.  The group taking the new drug, because it did not inhibit COX-1, might therefore be expected to encounter a higher rate of cardiovascular adverse events.  As to this concern, Dr Reicin referred to a memorandum by her colleague, Dr Thomas Musliner dated 21 November 1996.  Amongst other things, Dr Musliner said:

    If patients are allowed to use low‑dose aspirin in an MK‑966 vs. NSAID comparator design study, the published data suggest that the “background” PUBs [ie perforations, ulcers and bleeds] rate in the selective Cox‑2 inhibitor group can be anticipated to be ~1.5 fold higher than if aspirin use were not permitted.  Since the GI [ie gastrointestinal] effects of low‑dose aspirin (particularly if an enteric‑coated formulation is used) are predominantly attributable to its antiplatelet effect (rather than any local effect) it is likely that GI risk will be increased more in the Cox‑2 inhibitor group than in the NSAID group, because platelet function will already be impaired in the latter group. …

    If aspirin prophylaxis is not permitted, there is a substantial chance that significantly higher rates of CV AE events (MIs, angina, strokes, TIAs, etc.) will be observed in the selective Cox‑2 inhibitor group compared to the standard NSAID group … While one could argue that the differences are not unexpected due to the absence of antiplatelet effect for the selective Cox‑2 inhibitor, it would create a negative aspect to the results and leave open the question (reasonable or unreasonable) whether the drug might in some other way be contributing to such events.

    What Dr Musliner referred to as “MK‑966” was the drug which later became Vioxx.

20. In February 1997, Dr Musliner sent Dr Reicin a draft of a gastrointestinal clinical outcomes protocol that he had helped prepare.  It would compare MK‑966 with two non‑selective NSAIDs, diclofenac and ibuprofen.  The draft proposed the exclusion of patients who needed to take low‑dose aspirin, but permitted “patients with a history of myocardial infarction or coronary arterial bypass grafting more than 1 year prior to study start” to participate.  Dr Reicin said that patients such as these routinely received low‑dose aspirin for cardioprotection.  She made a number of endorsements on the draft, including the following:

    Do we want to allow high risk patients in the study given the risks we have discussed?  I think this will definitely make enrollment more difficult, but I am still concerned that the NSAID group will be getting cardioprotection that the 966 group will not – I sent you and Alan an article on flurbiprofen given after PTCA – it decreased the reocclusion rate compared to placebo – no comparison to aspirin.

    Dr Reicin referred to this endorsement to demonstrate that, at the time, the theory that she and her colleagues at MRL entertained was that the group in the study receiving the traditional NSAID would be getting cardioprotection, while the MK‑966 group would not.  She said that she was not considering the possibility that MK‑966 might be prothrombotic.

1. The draft of the gastrointestinal outcomes protocol was sent also to Dr Briggs Morrison, another research scientist at MRL.  He sent an email to Dr Reicin in which he said:

   Would allow low dose aspirin – I know this has been discussed to death, but real world is everyone is on it, so why exclude AND without COX-1 inhibition you will get more thrombotic events and kill drug.

   In a response to Dr Morrison, Dr Reicin wrote:

   Low Dose Aspirin – I HEAR YOU!  This is a no win situation!  The relative risk of even low dose aspirin may be as high as 2‑4 fold.  Yet, the possibility of increased CV [ie cardiovascular] events is of great concern – (I just can’t wait to be the one to present those results to senior management!).  What about the idea of excluding high risk CV patients – ie those that have already had an MI, CABG, or PTCA?  This may decrease the CV event rate so that a difference between the two groups would not be evident. The only problem would be – Would we be able to recruit any patients?

   Dr Reicin was cross‑examined about this response.  She resisted the suggestion that the parenthetical passage meant that she did not want to have to tell senior management that more cardiovascular events were being seen amongst patients taking Vioxx.  She said:

   I think it was more saying, “We would have done this large study.  We would see a difference.  There would be no placebo”.  And while it was likely that the difference would be caused by the cardioprotection of NSAIDs, you couldn’t prove it, you had a new drug and you would have results that people would have a difficult time interpreting.

2. As events turned out, Merck did not proceed with the gastrointestinal outcomes study that had been the subject of Dr Musliner’s draft. 

   Protocol 023

3. A study which did proceed, and which was significant in the understanding of the mechanism of coxibs, was Protocal 023, a pharmacology study conducted between May 1996 and January 1997.  According to Dr Reicin, this study was conducted because traditional NSAIDs were known to cause sodium and water retention by inhibiting the synthesis of prostaglandins in the kidney.  It was known that both COX-1 and COX-2 were constitutively expressed in the kidney, but it was unclear whether these side-effects were caused by the inhibition of COX-l or of COX-2.  Protocol 023 was designed to study whether patients receiving MK‑966 would experience salt retention similar to that experienced by patients receiving a traditional NSAID.  In the study, 36 healthy older subjects were randomised to MK‑966, the traditional NSAID and placebo (12 per arm).  They were confined for at least 17 days and placed on a special diet.  Regular urine and blood samples were taken from them.  The amount of salt in the urine was the primary measurement, but investigators also measured the urinary metabolites of prostacyclin and thromboxane, known as PGI‑M and TX‑M respectively.

4. Merck received the results of Protocol 023 some time after 29 August 1997.  On 20 October 1997, Dr Morrison, the clinical monitor for the study, sent a memorandum to a number of his colleagues, including Dr Reicin.  Relevantly to the present issue, Dr Morrison said:

   The most surprising result from this study is the analysis of prostaglandin metabolism.  In terms of systemic PG production, 2 things were analyzed.  The first is … [a] metabolite of TxB2. … [T]he effect of MK‑0966 … was not different from placebo confirming COX-2 selectivity. The second is PGI‑M, which is a metabolite of prostacyclin which is largely derived from endothelial cells.  Surprisingly, MK‑0966 had just as pronounced an effect on this endpoint as [the NSAID]. Although both COX-l and COX-2 are known to be expressed in endothelial cells, this result suggests that most of the prostacyclin production comes from COX-2.  Alan and Barry are discussing this with Dr. Oates and other prostaglandin experts. Whether there is any clinical implication of inhibiting prostacyclin more than thromboxane is unclear.

   According to Dr Reicin, MRL scientists reviewed the academic literature and conducted animal and human studies the better to understand the questions raised by the urinary metabolite data from Protocol 023.

5. Part of MRL’s consideration of the data from Protocol 023 was to undertake an analysis of the incidence of cardiovascular serious adverse events in those of its Phase IIb/III osteoarthritis clinical trials.  The analysis was the subject of a report by Dr Doug Watson dated 2 February 1998.  In the introductory section of his report, Dr Watson said:

   In … Protocol 023 …, Vioxx (50 mg daily), and indomethacin (50 mg 3 times daily) were both found to significantly reduce the urinary excretion of PGI‑M compared to placebo.  However, Vioxx had no effect on systemic thromboxane production (largely platelet derived) as assessed by measurements of serum TxB₂ and the urinary metabolite, 11‑dehydro‑thromboxane B₂.  It was felt that the reduction in urinary PGI‑M likely reflects both a reduction in renal PGI₂ generation … and to some undefinable extent a decrease in systemic PGI₂ synthesis. … PGI₂ is synthesized ubiquitously in blood vessel walls from arachidonate derived from either the vessel wall or the platelet.  It is the most potent of all inhibitors of platelet aggregation, and has vascular dilatory properties as well.  Conversely, TXA₂, a potent platelet aggregator and vasoconstrictor, is synthesized primarily by the platelet … The clinical implications of partially inhibiting the production of PGI₂ without inhibiting thromboxane generation systemically are unknown.  These findings raised concern about the potential for Vioxx to predispose to thrombotic cardiovascular … events.  Although there was not any evidence of an increased incidence of such events in the unblinded clinical trials of Vioxx to date, seven studies of Vioxx are currently ongoing.  These studies are still blinded to treatment allocation, and comparisons of CV events in Vioxx treated patients compared to controls cannot be performed.

   For comparison in his analysis, Dr Watson used placebo data from corresponding trials of other drugs, Fosamax and Proscar.  The purpose of the analysis was stated as follows:

   The purpose of this analysis was to provide information on which to base a recommendation to the Vioxx project team regarding the need for more formal monitoring of the risk of thrombotic CV serious adverse events … with Vioxx.

   The “specific objective” was stated as follows:

   The specific objective of the analysis was to evaluate the incidence of thrombotic [cardiovascular serious adverse events] among patients in the Vioxx Phase IIb and III [osteoarthritis] trials and their extensions, stratified by age and time period at risk. For purposes of comparison, the incidence of the same events was estimated with placebo control patients from Fosamax and Proscar clinical trials, and to the incidence of [cardiovascular disease] in a population‑based epidemiological study.

   Dr Watson noted that the study had limitations, such as the estimation required in relation to data from ongoing studies, misclassification of events, and the potential for bias inherent in the use of historical controls.  Nonetheless, Dr Watson concluded his report in the following terms:

   Based on this analysis, the [cardiovascular serious adverse event] incidence rates in trials of Vioxx appear roughly consistent with what would be expected in the general population, and there is no clear evidence of consistently elevated risk compared to age‑adjusted placebo controls from Proscar and Fosamax trials.  As a result, no change in the conduct of the Vioxx trials appears warranted based on present results. An analysis of [cardiovascular serious adverse] event rates in patients treated with Vioxx compared to those treated with Vioxx [sic] placebo/comparators is recommended when the trial databases are unblinded.

6. The results of Protocol 023 were published as Catella‑Lawson (1999).  Dr Garret FitzGerald was one of the authors.  Although not published until May 1999, I note, from a footnote to the article to which I next turn, that the authors of this (ie the Catella‑Lawson) article appear to have reported on the results of Protocol 023 at a vascular biology symposium in San Francisco in April 1998.  The authors noted that the metabolite TX‑M was reduced in the NSAID arm, but not in either the MK‑966 arm or the placebo arm.  This result was consistent with the sparing of COX-1 (and therefore of TXA₂) by MK‑966, and was expected.  But they also noted that the metabolite PGI‑M was reduced in both the MK‑966 and in the NSAID arms.  This result was not expected.  The authors said:

   An additional finding of this study was the suggestion that extrarenal biosynthesis of prostacyclin also was mediated by COX-2.  This was unexpected because COX-1, but not COX-2, is expressed constitutively by endothelial and vascular smooth muscle cells in vitro …

   The authors suggested several explanations as to how it might be that COX-2 mediated the production of vascular prostacyclin, including the up‑regulation of the enzyme by laminar shear stress in the endothelium, the biosynthesis of prostacyclin via COX-2 in subjects of advanced age experiencing platelet activation and inflammation, and the up‑regulation of the enzyme in response to the shedding by activated platelets of microparticles containing arachidonic acid.  However, it was the realisation that COX-2 may be responsible for the production of endothelial prostacyclin that effectively initiated the scientific debate that lies at the heart of this proceeding.  The authors of this article raised the question whether the selective inhibition of COX-2, by turning off the production of prostacyclin in circumstances where it might otherwise be induced while leaving the production of thromboxane unaffected, might have a prothrombotic tendency.  They said:

   Presently, the implications of prostacyclin suppression in vivo are unclear. … Prostacyclin formation by the vasculature is of functional importance in limiting the response to a thrombotic insult in mice, and we have shown previously that urinary excretion of PGI‑M is increased in syndromes of platelet activation. …  It remains to be established whether treatment with specific COX-2 inhibitors will suppress this response.

   The hypothesis that, if the production of endothelial prostacyclin is blocked but that of platelet thromboxane is unaffected, an imbalance will result with possible thrombotic outcomes came to be known as the “FitzGerald hypothesis”. 

7. Dr FitzGerald was also a co‑author of what has come to be regarded as a companion study to that published as Catella‑Lawson (1999).  This study was conducted by the same group of researchers as were involved in the Catella‑Lawson study.  It was published (a few months, it seems, before the Catella‑Lawson study) as McAdam (1999).  The study was concerned to examine the effects of celecoxib on indices of COX-l dependent thromboxane and on systemic prostacyclin.  It was found that both celecoxib and the NSAID comparator (ibuprofen) inhibited the production of prostacyclin, but that only the NSAID inhibited the production of thromboxane.  The authors concluded:

   Celecoxib exhibits relative rather than absolute biochemical selectivity for COX-2 ex vivo at doses tolerated in humans.  Nonetheless, it does not modify TXA₂‑dependent platelet aggregation, reflective of its modest inhibitory effect on COX-1.  Ibuprofen and 800 mg celecoxib inhibit COX‑2 ex vivo and suppress urinary PGI‑M to a comparable degree.  This appears to extend to the class of COX-2 inhibitors.  It remains to be determined whether this effect is sustained during chronic dosing in age groups at risk for cardiovascular disease.  If this is so, trials much larger than those necessary to detect efficacy and safety in arthritis … will be necessary to determine whether cardiovascular consequences of inhibiting PGI₂ biosynthesis will modulate the anti‑inflammatory benefit to be derived from chronic administration of COX-2 inhibitors in humans.

   Thus, this McAdam study advanced essentially the same hypothesis about cardiovascular risk as was then shortly to be advanced by Catella‑Lawson and colleagues.

   The Board of Scientific Advisers’ Meeting

8. MRL referred consideration of the ramifications of Protocol 023 to its Board of Scientific Advisers, a panel of experts external to Merck who met once a year to review data from programs currently being undertaken.  Members of the Board came from academic centres around the world.  Two of them were Dr John Oates, an expert in prostaglandin biology from Vanderbilt University and Dr Myron Weisfeldt, a cardiologist from Columbia Presbyterian Medical Centre.  Relevantly to present issues, the Board met over the period 3‑6 May 1998.  The Board received a presentation from Dr Alan Nies, the head of the Vioxx project team within Merck (MK‑966 having, apparently, by then assumed its intended retail name).  Because it may be taken to represent the thinking of MRL at the time about Vioxx, it is useful to refer to that presentation in some detail.

9. In his “Introduction”, Dr Nies said:

   It is currently understood that prostaglandin synthesis in humans is catalyzed by at least two forms of cyclooxygenase, …COX-1…and…COX-2,…. COX-1 is constitutively expressed and enzymatically active in a variety of tissues including the stomach, intestine, kidneys and platelets. COX-1 may therefore be the isoform responsible for the physiological functions of prostanoids including gastric mucosal protection and normal platelet function.
   In contrast to COX-1, COX-2 is not constitutively expressed in most tissues but rather is induced by mediators such as serum growth factors, cytokines, and mitogens.  Synaptic activity has been shown to elevate COX-2 expression in rats. COX-2 has been detected in leukocytes, vascular smooth muscle cells, human rheumatoid synoviocytes, human amnion, and the brain.  COX-2 is also expressed in the normal kidney, where it may be responsive to dietary salt intake.  Colonic adenocarcinoma has also recently been associated with increased COX-2 expression.  In inflammatory exudates and in tissue culture, COX-2 induction is inhibited by corticosteroids.  Given the localization and pattern of induction, COX-2 is hypothesized to be primarily responsible for the synthesis of prostanoids that mediate responses to pathological processes such as the propagation of inflammation, pain, and fever.

   Dr Nies referred to the gastrointestinal toxicity of traditional NSAIDs, and continued:

   A specific COX-2 inhibitor would therefore have the potential to suppress the pathological effects of prostanoids (e.g., inflammation) without toxicity allegedly associated with inhibition of COX-1. If COX-1 derived prostanoids do not significantly contribute to the symptoms or pathogenesis of acute and chronic inflammation, then a selective COX‑2 inhibitor, free of dose limiting COX-l associated toxicity, may demonstrate comparable or possibly greater clinical efficacy than existing NSAIDs for a variety of clinical disorders.

10. Dr Nies explained, by reference to studies which had been performed, that Vioxx was a highly selective COX-2 inhibitor at the proposed therapeutic doses.  He discussed the efficacy of Vioxx in relation to osteoarthritis, rheumatoid arthritis and fever, and as an analgesic.  He then dealt with questions of safety, commencing with gastrointestinal safety and dealing with several other areas where Vioxx might be more or less safe than other drugs.

11. Finally, under the heading “Prostacyclin Metabolism”, Dr Nies said:

    In the renal study described above in subjects 60 – 80 years old balanced on a 200 mmol sodium diet, the urinary excretion of several prostaglandin metabolites was measured.  Indomethacin but not VIOXX^TM reduced the excretion of 11‑dehydro thromboxane B₂.  This finding was expected since this enzymatic metabolite of thromboxane A₂ largely reflects platelet COX-l activity in normal subjects and therefore should not be affected by COX-2 inhibition.  On the other hand, the excretion of two metabolites of prostacyclin, 6‑keto PGF_1α and 2,3, dinor‑6‑keto PGF_1α (PG‑M) were reduced following treatment with indomethacin 50mg. t.i.d. or VIOXX^TM 50 mg. QD for 14 days.  Standard thinking is that PGIM is index of total body synthesis of prostacyclin and that 6‑keto PGF_1α arises largely in the kidney (probably renal vasculature) but that some may arise from systemic sources.  The reduction of 6‑keto PGFl_1α by VIOXX^™ was not unexpected since COX-2 is known to be in the kidney.  However, the finding of an effect of COX-2 inhibition on the excretion of PGlM was entirely unexpected.  Current knowledge would suggest that COX-2 is not an important enzyme in the synthesis of prostacyclin by normal endothelium.  Therefore additional experimentation is required to understand these findings.  Experiments are being performed by Merck Frosst and Safety Assessment to determine whether 1) the effect on PGIM is shared by other COX-2 inhibitors, 2) whether VIOXX^TM alters the synthesis of PGI₂ from PGH₂, 3) whether VIOXX™ alters the metabolism of PGI₂ to PGIM, and 4) whether the kidney is a potential source for all of the metabolites.  The effect of lower doses of VIOXX™ (12.5 mg and 25 mg daily) on the excretion of PGIM in volunteers will be determined by Clinical Pharmacology.  Also, acetaminophen has been reported to reduce the urinary excretion of PGIM without affecting thromboxane metabolite excretion and this finding will be confined by Clinical Pharmacology.
    To assess the potential implication of these biochemical findings on cardiovascular health, the clinical team and epidemiology have analyzed the blinded VIOXX™ database for serious cardiovascular events.  The analysis does not suggest a concern. An initial look at the unblinded safety data from the Phase III comparison study vs. diclofenac (approximately 1300 patients followed for 6 months) also does not indicate an excess of cardiovascular events in patients treated with VIOXX™. Additional analyses will be performed on unblinded data when available.

    The renal study referred to was Protocol 023.

12. At the conclusion of their meeting, the Board prepared a memorandum recording their consideration of, and their recommendations in relation to, Merck’s Vioxx program.  In the opening “Background” section of their memorandum, the Board noted as follows:

    The Board notes that the freedom from gastrointestinal toxicity that provides such an advantage to Vioxx could lead to the use of doses that inhibit COX-2 to a greater degree than seen with current NSAlDs, and that this could lead to adverse effects of inhibiting COX-2 that are not predictable based [on] experience with current NSAIDs.

    Under the heading “Cardiovascular Pathophysiology”, the Board said:

    The Board addressed the potential for either benefits or adverse consequences of selective inhibition of COX-2 on coronary heart disease.  The possible effects of COX-2 inhibition on three separate components of the process leading to coronary ischemic events were considered.  These are:

    1.        The development of lipid‑rich coronary plaques

    2.The destabilization of the cap of these plaques by inflammatory cells, making them “rupture prone”, and

    3.The thromobotic occlusion of the vessel at the site of plaque rupture with ensuing consequences of ischemia.

    Dealing with the first item, the Board noted that the formation of foam cells was central to the process of atherogenesis, and continued:

    There is a growing body of evidence indicating that inflammatory disease is a risk factor for myocardial infarction, and such inflammatory processes almost certainly are accompanied by the release of cytokines that affect cells in the monocytic series in general, and COX-2 expression in particular.  Accordingly, it is appropriate to ask whether COX-2 expression in monocyte‑macrophage‑foam cell development regulates the progression of the atherosclerosis that accompanies dyslipidemias, either positively or negatively.  If this were the case, then inhibition of COX-2 might be expected to alter the process of plaque formation.

    As to the second item, the Board said:

    Recent evidence indicates that inflammatory cells are present in the region of the thinned‑out cap that covers atheromatous plaques, and it is thought that these inflammatory cells contribute to thinning the plaque at its margin that is the frequent site of plaque rupture.  As the critical cells in this process are inflammatory cells, the possibility exists that the products of COX-2 could regulate thinning the cap of plaques and render them rupture‑prone.

(c)Did Merck Australia fail to have adequate regard to the results of any research, investigations, clinical trials or observational studies undertaken or caused to be undertaken by Merck Australia, Merck Inc or others suggesting that the consumption of Vioxx materially increased the risk of suffering the condition? If so, was that failure less than reasonable in all of the circumstances?

(d)Did Merck Australia fail to provide adequate information, advice or warning to the general public or to health care professionals to the effect that the consumption of Vioxx materially increased the risk of suffering the condition?  If so, was that failure less than reasonable in all of the circumstances?

(e)Did Merck Australia develop and implement a marketing strategy or campaign by which it formulated and disseminated to health care professionals in Australia any and which of the following representations about Vioxx:

(i)      Vioxx has an excellent gastrointestinal safety profile compared with other non-steroidal anti-inflammatory drugs (“NSAIDs”);

(ii)     Vioxx has an excellent overall safety profile compared with other NSAIDs;

(iii)    Vioxx does not increase the incidence of adverse cardiovascular events;

(iv)    higher rates of myocardial infarction and other cardiovascular events among persons taking Vioxx relative to persons taking other traditional NSAIDs (in particular naproxen) did not indicate that Vioxx increased the risk of suffering adverse cardiovascular events but were attributable to the fact that the consumption of naproxen produced a lower incidence of cardiovascular events because naproxen inhibits platelet aggregation in a manner similar to aspirin while Vioxx does not;

(v)     the higher rates of myocardial infarction among persons taking Vioxx relative to persons taking naproxen observed in the Vioxx Gastrointestinal Outcomes Research Trial (“Vigor”) did not indicate that Vioxx increased the risk of suffering adverse cardiovascular events;

(vi)    any information to the effect that Vioxx was not as safe as other NSAIDs because the consumption of Vioxx materially increased the risk of suffering the condition was incorrect, misleading, exaggerated and/or unreliable.

If so, was that conduct less than reasonable in all of the circumstances?

10.Was it less than reasonable in all of the circumstances, at any time before 30 September 2004, for Merck Australia to distribute Vioxx in Australia?  If so, when?

11.Is the fact that the Product Information for Vioxx was approved by the TGA pursuant to the Therapeutic Goods Act , if proved, a complete answer to an allegation that Merck Australia was in breach of any common law duty by unreasonably failing to adequately disclose information in the Product Information?

Section 52 of the Trade Practices Act 1974 (Cth)

12.If the answer to question 5 is in the affirmative, did Merck Australia:

(a)label Vioxx without providing adequate information, advice or warning to the general public or to health care professionals to the effect that the consumption of Vioxx materially increased the risk of suffering the condition?

(b)market and distribute and/or supply Vioxx for sale in Australia without providing adequate information, advice or warning to the general public or to health care professionals to the effect that the consumption of Vioxx materially increased the risk of suffering the condition?

(c)develop and implement a marketing strategy or campaign by which it formulated and disseminated to health care professionals in Australia, any and which of the following representations about Vioxx:

(i)      Vioxx has an excellent gastrointestinal safety profile compared with other NSAIDs;

(ii)     Vioxx has an excellent overall safety profile compared with other NSAIDs;

(iii)    Vioxx does not increase the incidence of adverse cardiovascular events;

(iv)    higher rates of myocardial infarction and other cardiovascular events among persons taking Vioxx relative to persons taking other traditional NSAIDs (in particular naproxen) did not indicate that Vioxx increased the risk of suffering adverse cardiovascular events but were attributable to the fact that the consumption of naproxen produced a lower incidence of cardiovascular events because naproxen inhibits platelet aggregation in a manner similar to aspirin while Vioxx does not;

(v)     the higher rates of myocardial infarction among persons taking Vioxx relative to persons taking naproxen observed in Vigor did not indicate that Vioxx increased the risk of suffering adverse cardiovascular events;

(vi)     information to the effect that Vioxx was not as safe as other NSAIDs because the consumption of Vioxx materially increased the risk of suffering the condition was incorrect, misleading, exaggerated and/or unreliable?

13.If Merck engaged in any of the conduct referred to in question 12 was any of that conduct in trade or commerce within the meaning of the Trade Practices Act ?  If so, which conduct?

14.Was any of the conduct identified in question 12, in all of the circumstances and context in which it occurred, misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the Trade Practices Act ?

15.Upon the proper construction of the Therapeutic Goods Act , does the fact that the Product Information for Vioxx was approved by the TGA pursuant to the Therapeutic Goods Act , if proved, exclude the operation of the Trade Practices Act in so far as an allegation is made that a failure to adequately disclose information in the Product Information contravenes:

(a)section 52 of the Trade Practices Act?

(b)section 75AD of the Trade Practices Act?

16.Is the fact that Vioxx was registered on the Australian Register of Therapeutic Goods pursuant to the Therapeutic Goods Act and available only by prescription of permitted prescribers, and that the Product Information for Vioxx was approved by the TGA pursuant to the Therapeutic Goods Act, if proved, a complete answer to an allegation that the respondent contravened:

(a)section 52 of the Trade Practices Act;

(b)section 75AD of the Trade Practices Act;

by failing to adequately disclose information in the Product Information?

Sections 75AD, 74B and 74D of the Trade Practices Act 1974 (Cth)

17.Were Vioxx tablets manufactured by Merck Australia “goods” that were "ordinarily acquired" as defined in section 74A(2) of the Trade Practices Act?

18.Is the fact that Vioxx was registered on the Australian Register of Therapeutic Goods pursuant to the Therapeutic Goods Act and available in its approved form and packaging only by prescription of permitted prescribers, if proved, sufficient to establish as a matter of law that Vioxx was reasonably fit for purpose within the meaning of s74B of the Trade Practices Act ?

19.Is the fact that Vioxx was registered on the Australian Register of Therapeutic Goods pursuant to the Therapeutic Goods Act and available in its approved form and packaging only by prescription of permitted prescribers, if proved, sufficient to establish as a matter of law that Vioxx was of merchantable quality within the meaning of s74D of the Trade Practices Act ?

20.If the answer to question 5 is in the affirmative, were Vioxx tablets defective within the meaning of section 75AD of the Trade Practices Act in that the safety of Vioxx tablets was not such as persons are generally entitled to expect by reason of the fact that the consumption of  Vioxx  materially increased the risk of suffering the condition?

21.If the answer to question 5 is in the affirmative, were Vioxx tablets defective within the meaning of section 75AD of the Trade Practices Act in that the safety of Vioxx was not such as persons are generally entitled to expect by reason of the fact that the packaging and labelling of Vioxx and the Vioxx product information did not contain adequate information, advice or warning to the effect that the consumption of Vioxx materially increased the risk of suffering the condition?

22.If the answer to question 5 is in the affirmative, were Vioxx tablets not reasonably fit for the purpose of acquisition within the meaning of section 74B of the Trade Practices Act by reason of the fact that the consumption of Vioxx materially increased the risk of suffering the condition?

23.If the answer to question 5 is in the affirmative, were Vioxx tablets not of merchantable quality within the meaning of section 74D of the Trade Practices Act by reason of the fact that the  consumption of Vioxx materially increased the risk of suffering the condition?

24.If the answer to question 5 is in the affirmative, at all times before 30 September 2004 was the state of scientific or technical knowledge such as to enable Merck Australia to discover that the consumption of Vioxx materially increased the risk of suffering the condition?

25.Were the defects pleaded in paragraphs 33, 34 and 37 of the Further Amended Statement of Claim (if found to exist) caused by Merck Australia’s compliance with a mandatory standard or standards?

Claim against Merck Inc

26.If the answer to question 5 is in the affirmative:

(a)when did Merck Inc first know that the consumption of Vioxx materially increased the risk of suffering the condition?

(b)when ought Merck Inc to have first known that the consumption of Vioxx materially increased the risk of suffering the condition?

(c)did Merck Inc owe the group members a duty to take reasonable care to avoid acts and omissions that may expose them to a material increase in the risk of suffering the condition as a consequence of consuming Vioxx?

27.Did Merck Inc:

(a)not owe group members the duty of care alleged; or

(b)satisfy the applicable standard of care

by virtue of Merck Australia’s compliance with the relevant legislative requirements referred to in paragraphs 23(a)-(1) of the Defence to Amended Statement of Claim and the requirements imposed upon Merck Australia by the TGA pursuant to the powers granted by the Therapeutic Goods Act?

28.Did Merck Inc:

(a)not owe group members the duty of care alleged; or

(b)satisfy the applicable standard of care

by reason of the learned intermediary defence pleaded in paragraph 24 of the Defence to the Further Amended Statement of Claim?

29.If the answer to question 5 is in the affirmative:

(a)did Merck Inc fail to undertake or cause to be undertaken any or any adequate research, investigations, clinical trials or observational studies in order to ascertain the adverse side effects and health risks that may be associated with the consumption of Vioxx including a material increase in the risk of suffering the condition? If so, was that failure less than reasonable in all of the circumstances?

(b)did Merck Inc fail to have adequate regard to the results of any research, investigations, clinical trials or observational studies undertaken or caused to be undertaken by Merck Inc or others suggesting that the consumption of Vioxx materially increased the risk of suffering the condition? If so, was that failure less than reasonable in all of the circumstances?

(c)Did Merck Inc withhold from and fail to publish in medical publications or otherwise reveal data and information of which it was aware concerning adverse cardiovascular risks associated with the consumption of Vioxx? If so, was that failure less than reasonable in all of the circumstances?

(d)Did Merck Inc fail to provide to Merck Australia, and health care professionals in Australia or the Australian public any or any adequate information, advice or warning to the effect that the consumption of Vioxx materially increased the risk of suffering the condition?  If so, was that failure less than reasonable in all of the circumstances?

30.Was it less than reasonable in all of the circumstances at any time before 30 September 2004 for Merck Inc to supply Vioxx to Merck Australia in Australia?  If so, when?

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