The Full Court of the Federal Court of Australia has overturned the 2010 decision that marked the first successful class action ruling in the world in relation to arthritis drug VIOXX.

In March 2010, Justice Jessup:

  • found that VIOXX doubled the risk of suffering a heart attack, but rejected the contention that it contributed to other cardiovascular conditions;
  • held that Merck, Sharpe & Dohme (Aus) Pty Ltd (Merck) had contravened the then Trade Practices Act 1974 (TPA, now the Competition and Consumer Act 2010) as VIOXX was unfit for its purpose as an anti-arthritic drug and not of merchantable quality, awarding the representative applicant damages of $287,000;
  • concluded that, in some respects, Merck had breached its duty of care and engaged in misleading conduct, but rejected the representative applicant’s negligence claims and his claims under section 52 of the TPA based on the specific circumstances of his case; and
  • dismissed all claims under section 75AD of the TPA (defective products).  

Read our alert for all the detail on the first instance decision. 

Both Merck and the applicant appealed the decision.  However, steps have been taken for Justice Jessup to hear from other group members in the class action in the meantime, based on the claims on which the applicant succeeded.

The Full Court, comprising Chief Justice Keane and Justices Bennett and Gordon, today ruled in favour of Merck and overturned the damages award, dismissing the applicant’s personal action. 

The decision leaves open the possibility that limited claims by other group members could succeed, depending on their individual circumstances.  We will be writing more about the decision in an alert shortly.

Click here to read the judgment in full.

In 2007, Merck & Co Inc settled 44,000 claims by US VIOXX consumers for US$4,85 billion, with no admission of liability.  Class actions are also under way in Canada and the lead case in the United Kingdom goes to trial in 2012 in Scotland.