Merck's attack on Vioxx victims helps its stock price

So for one full day, Merck essentially worked very hard to convince the world that it is right and everyone else is wrong, particularly all those who expect compensation from Vioxx related lawsuits. If anyone died or was seriously injured, it was not Merck's fault. They were doing something else wrong to kill themselves or attract all kinds of other side effects.

And while Vioxx attorneys digest Merck's attack strategy and develop their own game plan, it looks like the analysts at Wall Street are getting excited by what Merck had to say: Merck will get rid of over 5,000 employees, it will keep the R&D level unchanged (which in the drug industry means that you are cutting back significantly), and embark on a plan to keep its costs under control.

Michael Krensavage of Raymond James & Associates is taking a contrarian approach and has raised his rating on the company to "strong buy" from "market perform". Or in other words, what Krensavage is saying is that after all that the company did, Merck is still the greatest company on the planet. "While the price of Vioxx woes are impossible to predict, Merck is unlikely to make a significant voluntary settlement for years," Krensavage wrote in a research note to his high-net worth clients. He added that even if Merck loses, it will have years of appeal and will make it harder for any Vioxx victims to collect anything. At this time, Krensavage is alone in being so bullish on the company. Other analysts see only ugly days ahead for the firm, particularly as news starts to filter in from overseas that Vioxx victims are filing lawsuits against Merck.

Another news that is catching the attention of the sympathizers of Vioxx victims is the medical malpractice legislation that President Bush advocated at today’s Economic Summit. The plan is designed to help companies like Merck at the expense of American people. The Center for Justice & Democracy, a non-partisan, public interest organization says, "This legislation would take away legal protections that have saved thousands of lives. These laws have protected us from dangerous and defective drugs and medical devices like Vioxx, the Dalkon Shield and Copper-7 IUDs, an antibiotic that caused cancer, oral contraceptives that caused life-threatening injuries, a pregnancy test that led to false-positives for cancer, and many others. Without these laws in place, drugs like Vioxx would still be sold and people would be hurt or killed. The Administration’s plan will result in Americans dying so that the drug companies can make even more money." A statement released by the group calls upon President Bush to stop putting corporate profits and special interests before the lives of average Americans, who will die under his proposals.

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