Merck Sharp & Dohme (Australia) Pty Ltd v Peterson

Merck Sharp & Dohme (Australia) Pty Ltd v Peterson - [2011] FCAFC 128 - FCAFC 2011 case summary — Zoe

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THE PROCEEDINGS 1 Mr Graeme Peterson had suffered from arthritic back pain for many years when he was first prescribed Vioxx by a medical practitioner, Dr John Dickman, on 10 May 2001. Vioxx provided Mr Peterson with relief from arthritic pain without the adverse gastrointestinal side-effects which he had suffered when using other drugs for his arthritis. Accordingly, he took it regularly pursuant to prescriptions provided by Dr Dickman over the next two and a half years. 2 In early December 2003, Mr Peterson experienced episodes of chest pain associated with atherosclerosis. Later, on 8 December 2003, he suffered a serious heart attack. The withdrawal of Vioxx from the market in September 2004 led Mr Peterson to suppose that there was a connection between his consumption of Vioxx and the occurrence of his heart attack. Mr Peterson brought proceedings in the Supreme Court of Victoria alleging that his consumption of Vioxx contributed to the heart attack. 3 The first respondent to the proceedings was Merck Sharp & Dohme (Australia) Pty Ltd (MSDA). The second respondent was MSDA's parent company, Merck & Co., Inc (Merck), a corporation based in the United States of America engaged in the development, manufacture, distribution and sale of pharmaceutical products which included Vioxx. The proceeding commenced by Mr Peterson was transferred to the Federal Court of Australia on 10 April 2006. 4 Mr Peterson's pleaded case was that MSDA knew, or ought to have known, before December 2003, that the consumption of Vioxx increased the risk of heart attack and should have warned him of that increased risk. Mr Peterson alleged that MSDA was negligent in this respect and was also guilty of misleading or deceptive conduct in contravention of s 52 of the then Trade Practices Act 1974 (Cth) (the TPA). 5 Mr Peterson also alleged that Vioxx was not fit for purpose and not of merchantable quality within the meaning of those terms in ss 74B and 74D respectively of the TPA. Finally, Mr Peterson alleged that MSDA was liable to compensate him pursuant to s 75AD of the TPA for injury suffered by him because Vioxx was a defective product. 6 The proceedings in the Federal Court were constituted as representative proceedings under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) in respect of group members who had consumed Vioxx on prescription by a medical practitioner in the period after 30 June 1999 and were subsequently diagnosed as having suffered (within 30 weeks after last consuming Vioxx) one or more of a number of conditions including myocardial infarction (MI). The only condition now relevant is MI. It was alleged that the MI suffered by each group member was caused by his or her consumption of Vioxx.

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THE PRIMARY JUDGE'S DECISION 7 Whether the consumption of Vioxx caused or contributed to Mr Peterson's MI was the major issue at trial. It was important in relation to all of Mr Peterson's causes of action. 8 The case against Vioxx was circumstantial: there was no medical "signature" for Vioxx which might indicate that Mr Peterson's heart attack was caused by Vioxx. In finding the circumstantial case against Vioxx proved, the primary judge relied upon a theory as to a physiological mechanism which might explain the operation of Vioxx in the body to produce an occlusion of the vasculature, and upon statistical evidence bearing upon the extent of the risk of harm from Vioxx in the population at large. 9 The first principal strand in his Honour's reasoning was based on evidence supporting the theory by which it was proposed that the consumption of Vioxx disturbed the body's balance of prostacyclin (a vaso-dilator that also inhibits blood clot formation) and thromboxane (a vaso-constrictor and hypertensive factor that facilitates clot formation). This disturbance might lead to the formation of a thrombus or thrombi (clot or clots) from platelets resulting from the rupture of plaque in the endothelium of atherosclerotic blood vessels. The thrombus or thrombi so formed were large enough to cause an occlusion of a major vessel supplying blood to the heart. The second principal strand in his Honour's reasoning was based upon epidemiological evidence which suggested that the consumption of Vioxx almost doubled the relative risk of heart attack in the population. 10 On the basis of this circumstantial evidence, the primary judge drew the inference that the consumption of Vioxx made a material contribution to the occurrence of Mr Peterson's MI. 11 On the other hand, his Honour did not accept a variation of the mechanism hypothesised on Mr Peterson's behalf whereby it was proposed that the consumption of Vioxx accelerated atherosclerosis by the absorption of thrombi into endothelial plaque. This alternative mechanism was essential to the case that Vioxx might contribute to a consumer's heart attack after consumption had ceased. 12 As to Mr Peterson's claim in negligence, the primary judge rejected Mr Peterson's pleaded contention that MSDA knew, or ought to have known, that the consumption of Vioxx increased the risk of MI. His Honour held that it was only in September 2004, when the results of the APPROVe trial became available and Vioxx was promptly withdrawn from the market, that MSDA knew or ought to have known of the increased relative risk resulting from the consumption of Vioxx. 13 Nevertheless, his Honour held that MSDA failed to exercise reasonable care for the safety of consumers because MSDA had failed to warn consumers of "a worrisome and important signal of potential cardiovascular risk associated with Vioxx" (primary judge's reasons for judgment (Reasons) at [594]). In this regard, his Honour held that the November 2001 amendment to the Product Information (PI) should have been, but was not, communicated to Dr Dickman by a "Dear Doctor" letter. His Honour held that MSDA thereby failed to exercise reasonable care for Mr Peterson's safety. His Honour's resolution of this issue in the negligence claim also informed his Honour's answer to a question posed for the purpose of the representative proceedings under Pt IVA of the Federal Court Act. 14 Nevertheless, Mr Peterson's claim in negligence failed. That was because Dr Dickman gave evidence that the necessary information was available to him and that he would have continued to prescribe Vioxx for Mr Peterson, who would have continued to take it, even with knowledge of the potential cardiovascular risk. 15 Mr Peterson's claim under s 52 of the TPA also failed. The primary judge found that MSDA's marketing of Vioxx was not misleading or deceptive. The primary judge concluded that the publication by MSDA of an amended PI after November 2001 when the Vioxx Gastrointestinal Outcomes Research (VIGOR) results had been obtained meant that MSDA's conduct in marketing Vioxx was not misleading or deceptive. This conclusion had adverse consequences both for Mr Peterson and for the representative proceedings. Further, his Honour found that Dr Dickman had not been influenced by MSDA's marketing, in that he would have prescribed Vioxx for Mr Peterson in any event. That finding also has adverse consequences for Mr Peterson's claim but not for the representative proceedings. 16 Mr Peterson's claim under s 75AD of the TPA against MSDA also failed. The primary judge held that Vioxx was defective within the meaning of this provision, but that MSDA was entitled to the "state of the art" defence afforded by s 75AK(1)(c) of the TPA. The primary judge held that the state of scientific or technical knowledge at the time the drug was supplied was not such as to enable the defect, namely the prothrombotic tendency of Vioxx, to be discovered. 17 The primary judge held that Mr Peterson was entitled to recover damages pursuant to ss 74B and 74D of the TPA. As to s 74B, Vioxx was not reasonably fit for the purpose implicitly made known to MSDA, viz, the safe relief of arthritic pain, in that an arthritic pain medicine which involved a relative risk of MI of 2 was not reasonably fit for that purpose. As to s 74D, Vioxx was not of merchantable quality because it was reasonable for a consumer to expect that a medication for the relief of arthritic pain would not involve a relative risk of MI of 2. 18 On the basis of the success of Mr Peterson's claims under ss 74B and 74D, an award of damages was made in his favour in the amount of $330,465.35. 19 On 18 June 2010 the primary judge determined questions relating to the claims of other class members. Some of these questions raised issues common to those raised in Mr Peterson's claim. The Schedule of the questions and his Honour's answers is attached as Annexure A to these reasons. 20 No decision has yet been made concerning the entitlements of other class members. 21 The claims against Merck were dismissed. It is not a party to the appeal to this Court by MSDA or the cross-appeal by Mr Peterson.

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THE APPEAL AND CROSS-APPEAL 22 MSDA appeals against the decision of the primary judge challenging his Honour's conclusions on the issues of causation, negligence and contravention of ss 74B and 74D of the TPA. MSDA also contends that his Honour erred in holding that Vioxx was defective within the meaning of s 75AD of the TPA. 23 MSDA also seeks leave to appeal from the Order by the primary judge on 18 June 2010, seeking to argue that the primary judge erred in his determinations of the questions relating to group members. Leave to appeal is required because each determination is an interlocutory judgment. 24 Mr Peterson cross-appeals against the decision of the primary judge challenging his Honour's conclusions in relation to: The availability of the "state of the art" defence in s 75AK(1)(c) of the TPA; and The rejection of the alternative mechanism by which Vioxx might have contributed to Mr Peterson's MI. The relevance of this variant mechanism is for the representative proceedings involving persons who had ceased to take Vioxx some time before suffering injury. 25 His Honour's findings of primary fact are not challenged in either the appeal or the cross-appeal save in relation to his Honour's rejection of the alternative mechanism by which the consumption of Vioxx might have contributed to Mr Peterson's MI by the absorption of thrombi into endothelial plaque. In the interests of accuracy, we propose to address the parties' arguments on the issues raised in the appeal and cross-appeal with close attention to the specific findings of primary fact made by his Honour. Before we turn to this discussion, it is necessary in the interests of coherence of exposition to summarise more broadly the primary judge's reasons relating to the evidence of the development and investigation of Vioxx, and the suggested bases for concluding that the consumption of Vioxx caused Mr Peterson's heart attack. We acknowledge that this approach will result in a degree of repetition of his Honour's findings and of the evidence on which they were based, but that cannot be avoided having regard to the complexity of the terms and hypotheses with which his Honour was obliged to grapple.

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THE PRIMARY JUDGE'S REASONS 26 The primary judge set out some background material concerning cyclooxygenase (COX) in the Reasons at [6]-[7]. COX is an enzyme that is ubiquitous in the body and, depending on its 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). 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. In the stomach and duodenum, COX operates constitutively as a defence factor that helps the stomach and duodenum resist being digested by their own corrosive acid juice. In the vasculature, COX is involved in the production of thromboxane A2 (thromboxane), a clotting and vaso-constricting agent. In the endothelium of blood vessels it is involved in the production of prostacyclin, an anti-coagulant and vaso-dilating agent. In 1990 it was discovered that there are in fact two isoforms of COX; one of which is constitutive (COX-1) and the other inducible (COX-2). Vioxx (containing the active ingredient rofecoxib) inhibits only COX-2. As such it is referred to as a COX-2 inhibitor or a coxib. 27 At [477]-[478], his Honour set out the basic steps in the development of cardio-vascular thrombotic (CVT) disease as follows: In terms with which the other cardiologists did not disagree, Prof Vaughan laid out the basic steps in the development of CVT disease as follows: 1) injury to the arterial wall; 2) the adherence and migration into the vessel wall of monocytes (a certain type of cell); 3) uptake of oxidized LDL (low-density, or "bad" cholesterol) into the arterial wall; 4) progression of lipid accumulation within the atherosclerotic plaque and development of a necrotic, lipid core; 5) destabilization and thinning of the plaque's fibrous cap overlying the necrotic, lipid core; 6) rupture or erosion of the fibrous cap exposing the highly prothrombotic contents of the plaque to the circulating blood; and 7) thrombosis and resulting ischemia. Prof Zipes explained that there were "roughly four … main stages" of atherosclerosis: The first stage for the development of atherosclerosis is that of endothelial injury, or damage to the inner cellular lining of the blood vessel wall (by hypertension, shear stress, toxins like nicotine, diabetes, etc.). The damaged inner lining attracts the adherence of white blood cells to its surface … The second stage is one of fatty streak formation. The LDL cholesterol ("bad" cholesterol) penetrates the endothelium … and accumulates in the vessel wall. When this LDL is oxidized as a result of its penetration into the arterial wall … it sets up an inflammatory reaction in the endothelium, attracting more white blood cells that ingest the oxidized LDL. These white blood cells called monocytes become "foam cells" after they ingest the LDL, and are the hallmark of the fatty streak … These cells also elaborate a host of inflammatory mediators … that promote inflammation in the fatty streak, regulate the direction, amplitude and duration of the immune process, and contribute to the progression of the lesion and formation of a plaque. The third stage is one of fibrous cap formation, which is probably the first step in the development of a complex lesion that can cause an acute thrombosis … that can close off an artery. This fibrous cap prevents the lipid core that has accumulated beneath it from contacting the blood pool. But the cap is susceptible to damage from activated white blood cells that secrete enzymes which weaken the collagen in the cap. Inflammation, occurring for reasons that are poorly understood, appears to play an important role in the activation of white blood cells that later undermine the fibrous cap. The final stage is the development of a complicated atheroma, which typically occurs when rupture of the weakened fibrous cap causes the blood to come into contact with the lipid core, causing the formation of a thrombus. Physical disruption of the atherosclerotic plaque, due to fracture of the fibrous cap or superficial erosion of the intima, commonly causes acute thrombosis. Thrombus formation occludes the blood vessel, interrupting blood flow to the perfused organ, in this case the heart. If the thrombus dissolves spontaneously, it may cause a healing response that thickens the fibrous cap, making it bulge into the lumen of the artery and further restricting blood flow by the atheroma. If the thrombus persists and completely occludes the vessel, the downstream myocardium dies due to lack of blood flow, which is the definition of [MI]. 28 It is uncontroversial that the production of thromboxane is the work of COX-1. A question before the primary judge was the work of COX-2. Mr Peterson contended that the production in the endothelium of prostacyclin is the work of COX-2. Accordingly, he contended that Vioxx blocks the production of endothelial prostacyclin in blood vessels. The theory which became known as the "FitzGerald hypothesis" was that Vioxx inhibited the synthesis of prostacyclin.

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The FitzGerald Hypothesis 29 The FitzGerald hypothesis was named after Dr Garret FitzGerald, an author of a publication in which the results of what was known as Protocol 023 were published. The authors concluded that the extrarenal (outside the kidney) biosynthesis of prostacyclin was mediated by COX-2 (Reasons at [46]). The authors suggested several explanations as to how it might be that COX-2 mediated the production of vascular prostacyclin. His Honour noted at [46]: 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. 30 A description of a possible mechanism appeared in the considerations of the Merck Board of Scientific Advisers, as reported by the primary judge at [53]. The possibility was described as follows: After the rupture of a coronary plaque, factors which regulate thrombus formation and which regulate the occurrence of ischemic ventricular fibrillation are critical to the clinical outcome. The initial thrombus at the site of plaque-rupture is platelet-rich and is labile. Accordingly, it is susceptible to any anti-aggregatory influences… Prostacyclin is the most potent endogenous inhibitor of platelet-aggregation, and studies in animal models indicate that its participation in inhibiting platelet activation is substantial. … Not only does prostacyclin inhibit platelet activation, but it also potently inhibits the development of ischemic ventricular fibrillation in the canine model of [MI]. 31 The Board noted that it had been found that Vioxx reduces the urinary excretion of a prostacyclin metabolite and concluded that while the data were not obligatory to any conclusion, they should be taken as a basis for a hypothesis that should be "actively pursued" in order to understand any possible influences of a COX-2 inhibitor on coronary morbidity and mortality. 32 Put simply, the FitzGerald hypothesis, as it was advanced on behalf of Mr Peterson, was as follows: Vioxx did not cause atherosclerosis or plaque rupture (Reasons at [771]). Vioxx causes the build-up of lipid material within the arteries. Many people suffer from atherosclerosis that does not result in any negative medical event. This can be referred to as "silent atherosclerosis". Vioxx did not participate in or cause the rupture of an atherosclerotic plaque and caused it to separate from the blood vessels. Vioxx did not cause the material to aggregate. Mr Peterson's contention was that the explanation for a MI was that Vioxx prevented the synthesis of endothelial prostacyclin in blood vessels, leaving the production of platelet thromboxane unaffected. Prostacyclin acts to prevent the aggregation of the platelets and also acts as a vaso-dilator, to expand the lumen of the blood vessels. If this action is successful, there is not sufficient aggregation to cause a thrombotic event, or the blood vessel expands so that the aggregated plaque does not occlude the blood vessel. While it can be accepted that a free and uninhibited production of prostacyclin does not necessarily prevent occlusion and MI, the theory is that there is a range of cases where the prostacyclin could succeed in breaking down the aggregation and/or dilating a blood vessel, so that MI did not occur. Mr Peterson contended that he was one of those cases. The absence of prostacyclin meant that where there was an aggregation of platelets and the consequent clotting of blood, the mitigating effects of prostacyclin being absent rendered it more likely that the aggregation had thrombotic consequences. The consequences were cardiovascular events. 33 The FitzGerald hypothesis is, in essence, that if the production of endothelial prostacyclin is blocked but that of platelet thromboxane is unaffected, an imbalance will result with possible thrombotic outcomes. The thesis was predicated upon the blockage of the production of endothelial prostacyclin. That is, the presence of COX-2 in the endothelium was a necessary precondition to the validity of the FitzGerald hypothesis (Reasons at [487]). On the balance of probabilities, the primary judge was not satisfied (Reasons at [495] and [523]) that the presence of COX-2 in the endothelium was not shown.

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The VIGOR study 34 In 1998, Merck commenced the design of a major study into Vioxx, the VIGOR trial. It was a prospective, double-blind study of patients with rheumatoid arthritis (Reasons at [72]). The VIGOR trial compared Vioxx with naproxen, a traditional non-steroidal anti-inflammatory drug (NSAID) that had been on the market for 30 years. The trial tested the gastrointestinal effects. Four percent of the patients in the overall cohort were indicated for the regular taking of low-dose aspirin for cardioprotection. This meant, as the primary judge found at [123], that these patients had medical histories involving, inter alia, MI. A disproportionate number of the adverse effects were experienced by these patients. For example, some 38% of MIs were suffered within this 4% of the group. Patients in the Vioxx arm of the VIGOR trial had five times as many MIs as patients in the naproxen arm, with a disproportionate number of MIs occurring in patients in the Vioxx sample already at risk of elevated heart attack, as evidenced by their taking of aspirin. Four percent of the Vioxx cohort was assessed as being at elevated risk of heart attack. 35 On 12 January 2001 Merck applied to amend the PI for Vioxx with respect to the VIGOR data. The PI amendment was approved by the Therapeutic Goods Administration (TGA) and was amended to incorporate the results of the VIGOR study on 16 November 2001. An amendment to the Vioxx PI was made on 17 January 2002 to add information about the VIGOR study for patients with rheumatoid arthritis and the TGA approved a new indication for Vioxx for rheumatoid arthritis. 36 In the Precautions section of the PI as approved on 16 November 2001, a new subheading was introduced, "Aspirin", under which it was stated that Vioxx was not a substitute for aspirin for cardiovascular prophylaxis because of its lack of effect on platelets. There was also a reference to cardiovascular effects of Vioxx in the terms of the VIGOR study which included the statement (Reasons at [258]): The difference in anti platelet activity between some COX-l inhibiting NSAIDs and COX-2 selective inhibitors may be of clinical significance in patients at risk of thrombo-embolic events. Physicians should assess the importance of these data for an individual patient at risk for cardiovascular thrombo-embolic events, if considering long term therapy with a COX-2 selective inhibitor. 37 Mr Peterson argued that, at least after the VIGOR results were submitted by MSDA to the TGA on 11 April 2000 or, at the very latest, when the VIGOR study results were published in the New England Journal of Medicine on 23 November 2000, MSDA knew that the use of Vioxx resulted in an increased risk of MI. At trial, Mr Peterson relied on the fact that MSDA knew the VIGOR results by the end of March 2000, before the time when it began marketing Vioxx in Australia in February 2001 (Reasons at [229]). He made no complaint about the fact that MSDA began marketing Vioxx. 38 Merck explained the results of the VIGOR trial as demonstrating not an increased risk caused by Vioxx, which it said was not prothrombotic, but rather as the effect of the removal of the cardioprotective action of naproxen, which was said to have an "aspirin-like ability" to inhibit platelet aggregation. Merck summarised the results of the VIGOR group trial, in part, as follows (Reasons at [124]): In the VIGOR study population, therapy with naproxen was associated with a reduction in the incidence of thrombotic cardiovascular serious adverse experiences. The difference between the treatment groups in the rates of thrombotic cardiovascular events was due primarily to a reduction in the incidence of [MI] in patients treated with naproxen. 39 Merck's analysis was not that Vioxx caused an increase in MI but that Vioxx did not provide the cardioprotective effect of some NSAIDs by reason of the effect of those NSAIDs on COX-1 and, through that enzyme, on platelet aggregation by its effect on the production of thromboxane. 40 It was also relevant, as noted at [127] of the Reasons, that no similar incidence of increased MI was demonstrated in studies of other populations, including patients suffering from osteoarthritis and early Alzheimer's disease. In those studies the incidences of serious thrombotic cardiovascular serious adverse experiences were comparable between patients who received Vioxx, placebo or comparator non-selective NSAIDs. 41 Mr Peterson attacks Merck's conclusion as indicating some lack of bona fides on the part of Merck and MSDA. However, it is clear from his Honour's analysis of the results of the VIGOR trial and of Merck's analysis that he found that Merck analysed the results and came to a reasoned conclusion that explained the results in terms of naproxen protection rather than Vioxx causation. There is no challenge to that finding of the primary judge by Mr Peterson. The primary judge set out in some detail the various stages of the analysis of the VIGOR results. This included not only the variables involved, but also the theory as to the cardioprotective effect of NSAIDs that were potent in antiplatelet effects but which tended to be associated with clinical outcomes involving bleeding, compared to Vioxx, which did not have an antiplatelet effect but had an improved gastrointestinal effect. 42 One explanation for the different mechanisms of action that gave rise to the VIGOR results concerned the effect on platelet aggregation, as in the FitzGerald hypothesis. As his Honour noted at [128], Merck's analysis was that COX-2 selective compounds such as Vioxx would not be expected to provide vascular protective effect similar to those observed following chronic aspirin therapy. Merck considered whether: The moderate reductions in the synthesis of prostacyclin without COX-1 mediated inhibition of platelet aggregation … observed with COX-2 selective inhibitors theoretically could have mildly proaggregatory platelet effects. However, it was considered that partial inhibition of prostacyclin synthesis was a less likely explanation for the results of VIGOR than the potent anti-aggregatory effect of naproxen, a conclusion contrary to the FitzGerald hypothesis. 43 As the primary judge noted at [127], Mr Peterson was critical of Merck for having expressed the VIGOR results as though the question was whether naproxen was cardioprotective. That criticism is also made in the appeal. 44 The primary judge considered the evidence of the concerns expressed at the time of the publication of the results of the VIGOR trial and concluded, for example at [156], that while the potential for Vioxx to be prothrombotic was recognised as real, the consensus seemed to be that the antiplatelet activity of naproxen was, to an extent, responsible for the results of the VIGOR trial. 45 The primary judge analysed in detail the various assertions, articles and explanations offered for the results of the VIGOR study, both within Merck and in the literature. His Honour discussed various studies, including a pooled analysis that was provided to the Food and Drug Administration (FDA) on 22 May 2002, the results of which MSDA noted (Reasons at [183]) were "most consistent with naproxen having provided a relative cardioprotective benefit in these studies and argue against a prothrombotic effect of [Vioxx]". Some of the published material contained a reference to the FitzGerald hypothesis. However, even as at 22 March 2004, Dr Reicin of Merck interpreted the results of all relevant studies including VIGOR as "most consistent with the conclusion that Vioxx was cardioneutral, whereas naproxen was cardioprotective" (Reasons at [188]). 46 His Honour also dealt with a list of criteria proposed in 1965 by Sir Austin Bradford Hill (the Bradford Hill criteria) by reference to which questions of causation in epidemiology might conveniently be addressed (Reasons at [321]). The purpose of these criteria was to bridge the gap between association and causation (Reasons at [322]). 47 The results of the VIGOR trial yielded a relative risk of taking the Vioxx rather than naproxen of 5.00 (1.72, 14.29) in the case of MI (Reasons at [348]). His Honour noted (Reasons at [348]) that Professor Celermajer said that the strength of an association was often expressed as a relative risk, such that the higher the relative risk, the more likely the exposure is to be causally linked to the effect. His Honour noted at [350] that the controversy surrounding the VIGOR data related not to the apparent strength of the association indicated by them, but to one of the Bradford Hill criteria, the seventh criterion, namely whether the circumstance that naproxen was the comparator provided a convincing alternative explanation. His Honour accepted, apparently, that Merck in fact took the view that the results could and should be explained by the cardioprotective effect of naproxen rather than by a cardiotoxic effect of Vioxx. 48 The difficulty in drawing definite conclusions from the VIGOR trial is apparent from the primary judge's reasons. After examining the evidence in detail, including evidence from Merck and from independent cardiologists and statisticians, his Honour said (Reasons at [381]) that he was not prepared to find that it was not only possible but also likely that part of the observed discrepancy in the MI results in the VIGOR trial was due to the especially pronounced beneficial work of naproxen in the context of patients with a systemically inflammatory condition. His Honour also referred to evidence in which it was concluded that the cardioprotective effect of naproxen was about 2% and concluded (Reasons at [383]) that he was not satisfied that the cardioprotective effect of naproxen was sufficient to explain the MI data yielded by the VIGOR trial. The primary judge also referred (Reasons at [385]) to another dimension of the problem, which was what was described as "the fragility of the best estimate", such that when a trial is dealing with very low numbers, very subtle shifts have major effects on the best point estimate. Indeed, in a publication in September 2004, the authors, who included Dr FitzGerald, concluded that the combination of some cardioprotective effect of naproxen and "the play of chance" seemed to offer a plausible explanation for the apparent excess risk of MI in the VIGOR trial. They also said that "[w]hile other mechanisms cannot be discounted, there is currently little evidence in humans to support a prothrombotic effect of coxibs" (Reasons at [385]). It is pointed out by MSDA that this is not supportive of the FitzGerald hypothesis.

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The APPROVe study 49 In a study called APPROVe, which commenced in February 2000, a total of 2586 patients with a history of colorectal adenomas were randomised to either Vioxx or a placebo. The patients in the study were men with a mean age of 63.6 years. This study was ongoing in September 2004. On 23 September 2004 Merck became aware that the APPROVe External Safety Monitoring Board had observed the statistically significant increased risk of CVT events in those taking Vioxx compared to the placebo. Data from the study led the External Safety Monitoring Board for that trial to recommend that the trial be unblinded and that the trial be discontinued. That recommendation was accepted. On 30 September 2004 Vioxx was voluntarily withdrawn from the market. 50 The results of that trial were published in 2005. The relative risk of encountering a CVT event from taking Vioxx rather than a placebo was 1.92 (1.19, 3.11) (Reasons at [327]). For MI, the relative risk was 2.53 (1.11, 6.28). At [342] the primary judge concluded, after analysing the detailed evidence on the conclusions that could be drawn from the APPROVe trial, that at the 95% probability level the trial established, at least for a population of persons having the characteristics there studied, that the true relative risk of a MI from taking Vioxx in comparison with taking nothing at all, was 1.11 to 6.28. His Honour also noted the difficulties of extrapolating from the population of the APPROVe study to the population at large. At [347] his Honour said that he was prepared to accept that the APPROVe results reflect, at the 95% probability level, the true relative risk of taking Vioxx rather than placebo amongst persons in the broader population who have the characteristics of the patients in the trial. However, his Honour also accepted evidence that there was some uncertainty as to the generalisability of those results to the population at large. 51 In the APPROVe study the absolute event rates for MI were 21 events or 0.69 events per 100 patient years for patients consuming Vioxx, and nine events or 0.27 events per 100 patient years for patients consuming a placebo.

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The validity of the FitzGerald hypothesis 57 As the primary judge noted at [302], Mr Peterson's case was opened substantially by reference to the FitzGerald hypothesis, although in closing, Counsel relied primarily on the results of the APPROVe trial for their submission that the consumption of Vioxx in fact contributed to the occurrence of the pleaded cardiovascular conditions, which included MI. Even as at the date of hearing, the primary judge noted (Reasons at [304]) that there was no scientific consensus with respect to the relevant mechanism of action of Vioxx or as to whether the consumption of Vioxx caused, or involved an increase in risk of, Mr Peterson's MI. 58 The FitzGerald hypothesis was important for Mr Peterson's case on causation because under the Bradford Hill criteria the third criterion is the existence of a plausible biological explanation. MSDA says that the validity of the FitzGerald hypothesis was "the essential plank to build Mr Peterson's case", and that Vioxx made the difference between his suffering MI or not. Mr Peterson's case was that the FitzGerald hypothesis was biologically plausible and provided a reasonable explanation for the observed statistical association between the consumption of Vioxx and adverse cardiovascular events incurred by the taking of the COX-2 inhibitor Vioxx (Reasons at [480]). Mr Peterson says that it was not necessary for him to establish the FitzGerald hypothesis as an accepted fact in order to succeed. 59 As the primary judge stated at [479], it was the seventh step of Professor Vaughan's sequence or the fourth stage referred to by Professor Zipes, as set out at [478], where the imbalance induced by the selective inhibition of COX-2 hypothesised by Dr FitzGerald and his colleagues was said to have a biological impact, favouring the development of thrombotic material in the vasculature. 60 Professors Celermajer and Vaughan said that they were "not convinced that the FitzGerald hypothesis [was] biologically relevant to an understanding of the pathophysiology of plaque rupture and thrombosis" (Reasons at [480]). The basic premise of the FitzGerald hypothesis is that selective inhibition of COX-2, while sparing COX-1, upsets the critical balance between prostacyclin and thromboxane, thereby increasing the likelihood of thrombosis (Reasons at [481]). 61 Basically, as stated earlier, the FitzGerald hypothesis is that Vioxx, as a selective inhibitor of COX-2 enzyme, affected the balance between the production of thromboxane and the protective production of prostacyclin. Thromboxane is a potent vaso-constricting compound that is highly active in aggregating platelets and acts to promote clot formation. Prostacyclin is a vaso-dilator which causes dilation of the blood vessels and directly antagonises the constricting and procoagulant effect of thromboxane. The FitzGerald hypothesis is that Vioxx increases the risk of clot formation on an atherosclerotic plaque. 62 At [482] and following, the primary judge noted the reservations on the acceptance of the hypothesis as advanced by Professors Celermajer and Vaughan. One of the key assumptions necessary for the FitzGerald hypothesis to be operative is that COX-2 would need to be present in the endothelium. As the primary judge noted at [487], all of the cardiologists agreed that that circumstance was a necessary precondition to the validity of the hypothesis. His Honour considered the various opinions and the inferences that the cardiologists drew from the available data and said (Reasons at [495]): Ultimately, there was no satisfactory resolution of the disagreement between Prof Zipes, on the one hand, and Profs Celermajer and Vaughan, on the other hand, with respect to the questions whether COX-2 is present in the endothelium and, if so, whether it was responsible for the synthesis of prostacyclin in an atherosclerotic situation. 63 His Honour said that it did not appear to have been scientifically established that the prostacyclin has an endothelial source. However, his Honour concluded (Reasons at [495]) that: If the FitzGerald hypothesis is otherwise to be regarded as providing a plausible biological explanation for the results of the APPROVe study, I am not persuaded that it should be disqualified by the established fact that COX-2 is not present in the atherosclerotic endothelium. This does not make it quite clear as to whether his Honour made a positive finding as to whether the presence of the enzyme was or was not established. 64 His Honour then observed at [503] that no increase in the generation of platelet thromboxane consequent upon the administration of a COX-2 inhibitor had been seen. His Honour said that such consideration does compromise to an extent the utility of the FitzGerald hypothesis, although he could not say that it must be taken to have been disproven. His Honour concluded by saying (Reasons at [503]): To the extent that the applicant relies on the [FitzGerald] hypothesis as part of his legal case, however, I would have to say that the issues discussed in this part of my reasons justify the non-scientific conclusion that the validity of the [FitzGerald] hypothesis is a matter of vigorous controversy amongst the experts, and that the rationale relied on by opponents of the hypothesis does seem to be intelligible, coherent and justified by the empirical evidence to which they point. [Emphasis added]. 65 MSDA submits that, as this conclusion is expressed, the primary judge wrongly shifted the onus to MSDA and, in any event, his Honour found that the validity of the hypothesis could not be accepted. Nevertheless, accepting the opinion of Professor Harper (Reasons at [516]), the primary judge then said in summary at [519]: if an outcome occurs such as a thrombus then clearly the compensatory system has not been sufficient; a plaque rupture is a very strong stimulus to clot formation and therefore the compensatory system has to be strong to overcome it; in some plaque ruptures the stimulus is so strong that nothing can overcome it and, irrespective of whether a patient is or is not on Vioxx some plaque ruptures will clearly lead to a heart attack; it is "possible" that some plaques are ruptures that would otherwise not lead to an event; Quoting Professor Harper: "Vioxx does increase the risk of thrombosis (I am not convinced that it's necessarily the FitzGerald hypothesis) and that that sometimes leads to an event that otherwise wouldn't occur". 66 The primary judge repeated at [521] that the FitzGerald hypothesis had not been scientifically validated. Professors Zipes and Harper had contended that it was a biologically plausible explanation for what was observed in APPROVe and elsewhere. Professors Celermajer and Vaughan had concluded that the burden of the evidence was that the FitzGerald hypothesis, as an explanation of the consequences of the inhibition of COX-2 in the vasculature, was still no more than a hypothesis. 67 In assessing the plausibility of the FitzGerald hypothesis as an explanation for what was observed, his Honour emphasised that it sought to provide an explanation for adverse events which occurred only in a small minority of patients who took Vioxx. From the study, it could not be said that taking Vioxx "caused" the endpoints of a CVT event in the sense of giving rise to them as "a direct and inevitable consequence" (Reasons at [522]). His Honour repeated the fact that there was no scientific consensus as to the presence of COX-2 in the endothelium or as to its activity in a situation of atherosclerosis. As prostacyclin acts only in the immediate vicinity of its synthesis, if it were to have an effective anti-aggregatory role in the platelets, it would need to be synthesised in the endothelium at, or closely adjacent to, the point of interest. His Honour repeated that scientifically whether this is so remains a matter of hypothesis (Reasons at [523]). Further, while it was not conclusive, there was no report of an increase in the production of platelet thromboxane in response to the inhibition of COX-2 in the context of an inflamed vasculature which, his Honour concluded (Reasons at [524]), would have added to, rather than reduced, the uncertainty associated with the consequences in the vasculature of inhibiting COX-2 while sparing COX-1. 68 At [527] the primary judge emphasised that, whether or not the FitzGerald hypothesis is valid, "we are not here talking about absolutes". This is highlighted by his Honour's observation that (Reasons at [527]): In the unmedicated vasculature, the stimulus to platelet aggregation following plaque rupture may be weak, or it may be strong. A small or large thrombus may result. It may lead to an occlusion of an artery more or less immediately, or it may do so later, possibly in conjunction with other prothrombotic circumstances then existing. However these factors may work out in the normal case, when the selective inhibition of COX-2 is added to the mix, in Prof Harper's view there is now another pro-aggregatory factor which, in all cases, makes it that much more likely that what would not otherwise have been a CVT event becomes one and that a CVT event that would in any event have occurred occurs sooner. [Emphasis added]. It should be noted that this observation concerned the increased risk in the group of Vioxx takers as a whole and does not deal with an individual case. The effect of the FitzGerald hypothesis if valid was as the primary judge pointed out at [528], to leave the vasculature with "one less defensive mechanism than it has in the unmedicated state". However, there is a continued existence and importance of the other defensive mechanisms, so that the inhibition of COX-2 by Vioxx will not necessarily render thrombotic all events or circumstances which otherwise would not have been so. As the primary judge observed (Reasons at [528]): If the FitzGerald hypothesis is valid, it may be supposed that, over a population of patients, there will be some for whom the inhibition of COX-2 will make a difference, but it seems that there may not be a way of knowing before the event who those patients will be or of diagnosing after the event who those patients were. 69 The middle ground between the experts seemed to be that, if the FitzGerald hypothesis is valid, there are some stimuli that would be effectively counteracted by the compensatory systems as they exist in the unmedicated vasculature, but where the removal of prostacyclin by the inhibition of its synthesis would make a clinical difference. The primary judge noted that, taking into account the various combinations and permutations involved in the FitzGerald hypothesis, "it is not surprising that the studies that have looked at the cardiovascular consequences of COX-2 inhibition have produced varying results" (Reasons at [529]). 70 Vioxx was identified as possibly having harmful effects in the: elevation of blood pressure; acceleration of atherogenesis; and exaggeration of the thrombotic response to plaque rupture (the FitzGerald hypothesis). 71 The primary judge concluded that Vioxx did contribute to hypertension in some people but not to an extent that it would be outside the range of contribution by NSAIDs generally. Cardiologists agreed that the available data as to the effect of COX-2 inhibition on the progression of atherosclerosis are conflicting. 72 There was some evidence that Vioxx either had no effect, or had an effect by way of reduction, on the development of plaque (Reasons at [536]). Professor Zipes was of the opinion that Vioxx contributed to the progression of atherosclerosis. Having considered the whole of the evidence, his Honour concluded (Reasons at [541]) that he was not persuaded that the evidence was sufficient to justify a conclusion that Vioxx contributed to the acceleration of atherosclerosis in any or all of the respects identified by Professor Zipes. However, his Honour (Reasons at [542]) seemed to accept the evidence of Professor Harper that, while there was no evidence that Vioxx caused atherosclerosis: …the pro-thrombotic work of Vioxx most probably contributed to the thickening of plaque by a series of minor, clinically silent, events which, over time, accelerated the process of atherosclerosis. Professor Harper did not suggest that Vioxx had anything to do with the process of incorporation into plaques and thus the acceleration of the development of atherosclerosis. If the FitzGerald hypothesis was correct, Vioxx could promote the formation of thrombotic material over time and thus have an indirect effect on the acceleration of atherosclerosis. 73 The primary judge concluded that these propositions seemed to be conceptual or logical rather than empirical and were unsupported by data. In the result, his Honour said at [544] that in the circumstances: …it would be to overreach the science to conclude that Vioxx accelerated atherosclerosis, or to infer that the results of the studies and trials of Vioxx to which I have referred were given a plausible biological explanation not merely by the FitzGerald hypothesis itself but also by a state of affairs in the vasculature which was assumed, conceptually as it were, the more readily to arise if that hypothesis were valid. 74 After a detailed assessment of the evidence, including the results of the APPROVe study, the primary judge said he was "persuaded" that the FitzGerald hypothesis does provide (Reasons at [561]): …a plausible biological explanation for the excess of CVT events, and of [MIs] particularly, observed in APPROVe. His Honour said that he should make it clear that this conclusion did not involve a finding that the FitzGerald hypothesis was valid; much less did it involve a finding that, in every person who took Vioxx, the mechanism proposed by the FitzGerald hypothesis was active such that any CVT events suffered by that person must necessarily have been contributed to by Vioxx (Reasons at [562]). His Honour repeated that Mr Peterson only sought to establish that the FitzGerald hypothesis provided a plausible biological explanation for the results of APPROVe and the other clinical studies. 75 The primary judge then turned to the questions of whether an association between the consumption of Vioxx and MIs exists, and whether the consumption of Vioxx in fact contributed to Mr Peterson's condition.

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Vioxx and Mr Peterson's MI 78 The primary judge outlined Mr Peterson's own circumstances at [764]-[765]. Mr Peterson was characterised by a number of risk factors for MI as at 2001, namely hypertension, hyperlipidemia, obesity and the presence of left ventricular hypertrophy. He was highly likely to have had coronary atherosclerosis that was clinically silent at the time. He was a former smoker, male and aged 51 years. In December 2003 Mr Peterson suffered chest pain caused by a plaque rupture in his proximal left anterior descending coronary artery (Reasons at [759]). He had an MI approximately a week later when a thrombus or blood clot formed in the ruptured plaque, ultimately completely obstructing the artery (Reasons at [766]). By that time the risk factors were "slightly improved". There were insufficient data to enable the cardiologists to say whether the consumption of Vioxx by Mr Peterson had affected his blood pressure. Mr Peterson did not submit that his MI occurred because of Vioxx induced blood pressure elevation (Reasons at [765]). 79 The primary judge noted at [767] that the cardiologists agreed that, in a patient with multiple risk factors such as Mr Peterson, there was no way definitively to determine which risk factor caused the heart attack and, in the words of Professor Celermajer, there was: …no footprint of Vioxx, there is no signature of Vioxx to indicate that a particular heart attack was a Vioxx heart attack versus a common garden variety heart attack you have every day. His Honour noted that this was the same as saying that Mr Peterson may have had the very heart attack which he did have at the same time and at the same level of seriousness had he not been taking Vioxx. 80 The primary judge referred to the evidence of Professor Zipes who said that the likelihood of Mr Peterson having an infarction was increased by taking Vioxx and that, in his view, "to a reasonable degree of medical probability Vioxx played a substantial contributing role" (Reasons at [768]). Professor Harper expressed the view that Vioxx doubled Mr Peterson's risk of having a heart attack and that "if it is more than two times then it's more likely than not that Vioxx contributed to the heart attack", and that the data from APPROVe indicated a ratio of slightly more than 2:1 (Reasons at [768]). This meant, as the primary judge observed at [769], that the inference from such a study where the events of interest were twice as numerous in the group taking a particular drug as in the placebo group, half of those in the group taking a particular drug would have experienced the event anyway. In this context, the primary judge referred to a passage from the reasons of Spigelman CJ in Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at [137], where Spigelman CJ said that actual persuasion does not require a relative risk in epidemiological studies of 2.0, but that nevertheless, the closer the ratio approaches 2.0, the greater the significance that can be attached to the studies for the purposes of drawing an inference of causation in an individual case; that the "strands in the cable" must be capable of bearing the weight of the ultimate inference. 81 In a key passage (Reasons at [770]), the primary judge looked to the assessment of the attribution of a contributory role to Vioxx in Mr Peterson's heart attack. His Honour observed that it came down to interpretation of the data yielded by the various trials and studies. His Honour placed some weight on what he considered to be an implicit endorsement of the validity of the FitzGerald hypothesis by Professor Harper and the conclusion reached by Professors Harper and Zipes that the consumption of Vioxx increased the risk of Mr Peterson having a heart attack by approximately a factor of 2 (which they derived from APPROVe). While Professors Celermajer and Vaughan did not agree, his Honour seemed to conclude that this was because they could not come to such a conclusion of a contribution by Vioxx with "a reasonable degree of scientific certainty" (Reasons at [770]). The primary judge accepted that Vioxx did not cause atherosclerosis and did not cause plaque rupture (Reasons at [771]). After the events early in December 2003 when Mr Peterson experienced plaque rupture, he was, the primary judge said, in the high risk group referred to in the APPROVe result in that he had symptomatic atherosclerotic cardiovascular disease, that is, he was in that category immediately prior to the MI. The primary judge again turned to the FitzGerald hypothesis and said that, if valid, it required a potentially thrombotic environment in the vasculature, which existed for Mr Peterson. The primary judge then said (Reasons at [772]): I think it likely that [Mr Peterson's] was a case in which the absence of prostacyclin in the immediate vicinity of his injured artery made some contribution to the formation of the thrombus or thrombi that caused the occlusion which gave him his heart attack. I do not find that the heart attack would not otherwise have occurred: there is no way of knowing whether it would have. But I am satisfied that some material contribution was played by the brake on the synthesis of prostacyclin applied by the inhibition of COX-2, and therefore by the consumption of Vioxx. 82 At [772] the primary judge again referred to his finding that Vioxx made a material contribution to Mr Peterson's heart attack. The primary judge also observed that, had he not found that Mr Peterson had been taking Vioxx continuously, he could not have been satisfied that it contributed to his MI. 83 The parties in the appeal have focused on [772]. On its face there are some inconsistencies. The primary judge seems to be applying the FitzGerald hypothesis to link the MI with the absence of prostacyclin and the taking of Vioxx. In other parts of his Honour's reasons, he was at pains to say that the FitzGerald hypothesis needed to provide a plausible explanation but declined to find it valid. Without that hypothesis, there was no link between the absence of prostacyclin and the taking of Vioxx. His Honour's conclusion was that it was the absence of prostacyclin that made "some contribution" to the occlusion. 84 Mr Peterson emphasised that Vioxx would not only have affected prostacyclin synthesis but also the dilation of the blood vessels, which in turn affects whether a thrombus occludes the artery. The primary judge did not base his conclusion on that aspect of the proposed mechanism and action. What is clear, however, from his Honour's reasons is that the primary judge was not able to find that the heart attack would not have occurred other than for the taking of Vioxx. The data did not support that conclusion. The expert evidence did not support that conclusion and, as described by the primary judge, the FitzGerald hypothesis, even if accepted as valid, did not support that conclusion. 85 Having concluded our summary of the primary judge's findings, we turn to address the arguments agitated on appeal. The first of these concerns his Honour's conclusions on the issues whether the consumption of Vioxx caused Mr Peterson's MI.

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CAUSATION 86 Mr Peterson was at risk of suffering a heart attack quite independently of his consumption of Vioxx. The primary judge said at [764]-[765]: The cardiologists said that the applicant's risk factors for [MI] in 2001 were hypertension, hyperlipidemia, obesity and the presence of left ventricular hypertrophy. He was, the cardiologists agreed, "highly likely to have had coronary atherosclerosis that was clinically silent at the time". In addition, he was a former smoker, of male gender and aged 51 years. He was at moderate to high risk of a cardiovascular event over the next 5 years. Prof Harper estimated that risk at 20-25%, and the other cardiologists took no issue with that. Putting aside the possibility of the consumption of Vioxx as such increasing the risk, the cardiologists agreed that, by December 2003, the applicant's risk factors were "slightly improved". They noted that the applicant had lost weight and that his lipid profile had improved, although still abnormal. They considered that the other risk factors were essentially unchanged. The cardiologists were unable to say whether the consumption of Vioxx had affected the applicant's blood pressure, as there were insufficient data (only three blood pressure readings having been taken since the applicant commenced to take Vioxx). I should add that, although counsel for the applicant made the general submission that the consumption of Vioxx did lead to elevated blood pressure (a subject which I addressed at paras 532-535 above), they did not submit that this occurred in the case of the applicant himself. In any event, the evidence would be insufficient to sustain any such finding. Neither, in the applicant's case, was there any attention given to the question whether it was elevated blood pressure that led to his atherosclerosis as it existed in December 2003, and thus indirectly contributed to his heart attack. 87 The primary judge's ultimate conclusions on the issue of causation are at [772]-[773]: As the respondents and their experts pointed out, if valid, the FitzGerald hypothesis proposes an acute risk of thrombotic outcomes from the consumption of Vioxx. That there should be such a risk, however, requires first that there be a potentially thrombotic environment in the vasculature. That environment was, in the applicant's case, present in December 2003. I think it likely that the applicant's was a case in which the absence of prostacyclin in the immediate vicinity of his injured artery made some contribution to the formation of the thrombus or thrombi that caused the occlusion which gave him his heart attack. I do not find that the heart attack would not otherwise have occurred: there is no way of knowing whether it would have. But I am satisfied that some material contribution was played by the brake on the synthesis of prostacyclin applied by the inhibition of COX-2, and therefore by the consumption of Vioxx. It is a necessary premise of this finding that the applicant was taking Vioxx, more or less daily, in the weeks leading immediately to early December 2003. As I have found earlier, he was doing so because he had access to Vioxx obtained under his wife's prescription. Had that not been the case, I would not have been able to find, on the probabilities, that Vioxx made a material contribution to the applicant's heart attack. Here I refer to my treatment of the cardiologists' evidence as to the relevance of the pattern of use of Vioxx at paras 548-550 above. While I recognise the force of Prof Harper's evidence as set out in para 519 (which provided a measure of support for Prof Zipes' more categorical evidence on the same subject), in the light of my reasons on mechanism, and given the absence of any trial data with respect to risk in a situation of discontinuous administration of the drug, I could not be satisfied that Vioxx would, merely by having been taken by the applicant continuously down to about (say) the middle of October 2003, have contributed to what happened on 8 December 2003. In the words of Spigelman CJ in Seltsam, there would then have been insufficient "strands in the cable" to support such a finding. 88 On the hearing of the appeal, Mr Peterson's Counsel suggested, initially at least, that the second last sentence of [772], which seemed to contradict the last sentence in that paragraph, was either a reference to the angina attack which Mr Peterson suffered in early December, or to an inability on his Honour's part to be satisfied, as a matter of scientific fact, that Vioxx consumption was a necessary condition for the occurrence of a MI. These suggestions are less than compelling. 89 In the passage in question, the primary judge was expressly making findings in relation to a crucial question of fact of importance to all Mr Peterson's causes of action; it is impossible to accept that his Honour was speaking of a scientific, as opposed to a legal, conclusion. That this is so is made clear in the immediately preceding paragraph. At [771], his Honour said relevantly: Unlike Prof Celermajer, I am required to make an assessment of the probability that Vioxx caused or contributed to the applicant's heart attack. Here the actual circumstances of the applicant on 8 December 2003 are important. I accept the evidence of Prof Vaughan that Vioxx did not cause atherosclerosis and did not cause plaque rupture. However, the cardiologists are agreed that the applicant had clinically silent atherosclerosis in and subsequent to 2001, and that he experienced plaque rupture in early December 2003. … However that may be, the fact is that, after plaque rupture, the applicant was in the high risk group referred to in the APPROVe results - he had symptomatic atherosclerotic cardiovascular disease. He may have been in that situation earlier, but on 2 December 2003 he unquestionably was. 90 One may pause here to observe that the primary judge was correct to recognise that it was not open to him to decline to make a finding one way or the other on the issue of causation. As the High Court said in Amaca Pty Ltd v Ellis (2010) 240 CLR 111 at [5]-[6]: When, as here, medical and scientific examination cannot say whether exposure to respirable asbestos fibres was a cause of [the deceased's] cancer, the medical practitioner and the scientist have little choice but, as one witness said at trial, to "take it into consideration in looking at what might have caused his lung cancer". In their inquiries, the uncertainty about cause means that they cannot "exclude it from the end result". The courts' response to uncertainty arising from the absence of knowledge must be different from that of the medical practitioner or scientist. The courts cannot respond to a claim that is made by saying that, because science and medicine are not now able to say what caused [the deceased's] cancer, the claim is neither allowed nor rejected. The courts must decide the claim and either dismiss it or hold the defendant responsible in damages. 91 It is not possible to accept the suggestion put on Mr Peterson's behalf that his Honour was referring in [772] to the chest pains suffered by Mr Peterson in early December 2003. His Honour's findings were directed expressly to the heart attack which was the damage in respect of which Mr Peterson sues. To accept this argument would mean that his Honour did not make a finding on the crucial issue of causation. 92 Counsel for Mr Peterson ultimately submitted, possibly in the alternative to their earlier submissions, that the last two sentences of [772] were not self-contradictory and that his Honour in [772] was making a finding that Vioxx made a material contribution to the occurrence of the heart attack even though he could not find that, but for the Vioxx, the heart attack would not have occurred. On this view, his Honour was satisfied on the balance of probabilities that Vioxx made a contribution to the formation of a thrombus sufficiently large to occlude the blood vessel to the heart, but was not satisfied that a thrombus of the necessary size would not have developed without the prothrombotic agency of Vioxx. We consider that this understanding of his Honour's conclusions is correct. It is consistent with his Honour's observation at [527] of the Reasons (set out at [68] above), and with his Honour's references to evidence which he regarded as important. The primary judge said at [519]: Prof Harper's response … because of its importance, should be set out in full. He said: In any system there is always [a] compensatory system but if an outcome occurs such as a thrombus then clearly the compensatory system hasn't been sufficient. I think in the setting that we are describing a plaque rupture is a very strong stimulus to clot formation and therefore you need - the compensatory system has to be strong to overcome it. But the degree of stimulus depends on - not all plaque ruptures are the same so in some plaque ruptures the stimulus is so strong because of exposure of collagen, et cetera, that nothing can overcome it, and irrespective of whether a patient is or isn't on Vioxx some plaque ruptures will clearly lead to a heart attack. But it's possible that some plaques are ruptures that would otherwise not lead to an event. If the stimulus for thrombosis is slightly more, is slightly greater, then in that particular case the thrombus will occur, and my concept is that Vioxx does increase the risk of thrombosis. I am not convinced that it's necessarily the FitzGerald hypothesis, and that that sometimes leads to an event that otherwise wouldn't occur. The primary judge added at [519] the comment that: The sense of what Prof Harper most recently said in this passage would have been more accurately rendered in transcript as "… my concept is that Vioxx does increase the risk of thrombosis (I am not convinced that it's necessarily the FitzGerald hypothesis) and that that sometimes leads to an event that otherwise wouldn't occur." 93 Counsel for Mr Peterson submitted that his Honour's findings of ultimate fact were sufficient to sustain the judgment. Counsel for MSDA submitted that the primary judge's express refusal to find that Mr Peterson's heart attack would not have happened but for the taking of Vioxx meant that Mr Peterson's case should have been dismissed for want of an essential factual finding, namely, that it was more probable than not that the consumption of Vioxx caused or materially contributed to the occurrence of his heart attack. 94 We consider that the submission for MSDA must be accepted. Moreover, in our opinion, the primary judge's findings of primary fact do not afford a sufficient basis on which we should go further than his Honour and conclude that the consumption of Vioxx was a necessary condition of Mr Peterson's MI. 95 We proceed now to explain our reasons for these conclusions. First, we will discuss the legal principles relating to causation; we will then discuss the use of epidemiological studies and then we will discuss his Honour's findings of primary fact.

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Causation: The Test 96 In Chappel v Hart (1998) 195 CLR 232 at [27] McHugh J said: …If a wrongful act or omission results in an increased risk of injury to the plaintiff and that risk eventuates, the defendant's conduct has materially contributed to the injury that the plaintiff suffers whether or not other factors also contributed to that injury occurring. … This statement was approved in Naxakis v Western General Hospital (1999) 197 CLR 269 at [31] and [127]. 97 In Seltsam v McGuiness at [107]-[108] and [119]-[120], Spigelman CJ emphasised that proof that "the risk eventuated" in the specific injury suffered by the plaintiff is part of the plaintiff's burden, and that this burden is not discharged merely by showing an increased risk of injury by reason of the defendant's conduct: "Whether or not the increased risk 'eventuated', is the issue which must be determined". It must be shown that "Y had happened because of X" (emphasis in original). 98 That is the effect of the authorities on the test for causation under the common law in Australia. The position was summarised recently in Tabet v Gett (2010) 240 CLR 537 at [111]-[113]. Kiefel J, with whom Hayne, Crennan and Bell JJ agreed, said: The common law requires proof, by the person seeking compensation, that the negligent act or omission caused the loss or injury constituting the damage. All that is necessary is that, according to the course of common experience, the more probable inference appearing from the evidence is that a defendant's negligence caused the injury or harm. "More probable" means no more than that, upon a balance of probabilities, such an inference might reasonably be considered to have some greater degree of likelihood; it does not require certainty. The "but for" test is regarded as having an important role in the resolution of the issue of causation, although more as a negative criterion than as a comprehensive test. The resolution of the question of causation has been said to involve the common sense idea of one matter being the cause of another. But it is also necessary to understand the purpose for making an inquiry about causation and that may require value judgments and policy choices. Once causation is proved to the general standard, the common law treats what is shown to have occurred as certain. The purpose of proof at law, unlike science or philosophy, is to apportion legal responsibility. That requires the courts, by a judgment, to "reduce to legal certainty questions to which no other conclusive answer can be given". The result of this approach is that when loss or damage is proved to have been caused by a defendant's act or omission, a plaintiff recovers the entire loss (the "all or nothing" rule). [Footnotes omitted]. 99 The "but for" test serves, in this field of discourse, as a negative criterion. That is to say, unless the defendant's actionable conduct is shown to be a necessary condition of the plaintiff's injury, the plaintiff's claim will not succeed. Thus, in Amaca v Ellis at [11]-[12], it was accepted that a plaintiff must show on the balance of probabilities that the actionable conduct of the defendant was a necessary condition of the occurrence of the harm in respect of which the plaintiff claims damages. It is true, as Counsel for Mr Peterson pointed out, that this rule was not the subject of argument in Amaca v Ellis; but it is also true that this rule represents the law in Australia binding on all courts below the High Court. 100 In some countries which share Australia's common law inheritance this rule has been relaxed in recent years. In Evans v Queanbeyan City Council [2011] NSWCA 230 at [23]-[26] Allsop P explained how, in the jurisprudence of Canada and the United Kingdom, the concept of "material contribution" to injury may mean something different in some contexts from its meaning in Australian law. In some cases, a material contribution to an event may be shown by evidence of an increase in the risk of the event even though it is not possible to say that the event would not have occurred but for the conduct which gave rise to the increase in risk. Allsop P said (at [23]-[24]): It can be accepted that in Resurfice Corp v Hanke at 342-343 [24]-[25], the Supreme Court of Canada expressed the framework for "material contribution" in the absence of a positive conclusion from the "but-for" test as follows: However, in special circumstances, the law has recognized exceptions, to the basic 'but for' test, and applied a 'material contribution' test. Broadly speaking, the cases in which the 'material contribution' test is properly applied involve two requirements. First, it must be impossible for the plaintiff to prove that the defendant's negligence caused the plaintiff's injury using the 'but for' test. The impossibility must be due to factors that are outside of the plaintiff's control; for example, current limits of scientific knowledge. Second, it must be clear that the defendant breached a duty of care owed to the plaintiff, thereby exposing the plaintiff to an unreasonable risk of injury, and the plaintiff must have suffered that form of injury. In other words, the plaintiff's injury must fall within the ambit of the risk created by the defendant's breach. In those exceptional cases where these two requirements are satisfied, liability may be imposed, even though the 'but for' test is not satisfied, because it would offend basic notions of fairness and justice to deny liability by applying a 'but for' approach. Further, it can be accepted that the House of Lords and now the United Kingdom Supreme Court has modified the common law in the United Kingdom by accepting that, at least as a special rule in mesothelioma claims, fairness and justice demand that the factual link between the wrongful act and the harm to the plaintiff need only be a wrongful exposure of the plaintiff by the defendant to an amount of asbestos that would materially increase the risk of mesothelioma: Fairchild; Barker v Corus; and Sienkiewicz. In Sienkiewicz, the statements of principle may also be seen not to be limited to mesothelioma. 101 Allsop P went on to note the policy considerations which led to the adoption overseas of a rule that increased risk may itself be sufficient to establish a material contribution for the purposes of causation. His Honour said at [27]-[31]: …[W]hat was common to the several views of their Lordships in Fairchild was the necessity to depart from the common law's usual rule of the need for proof on the balance of probabilities in circumstances where it could be unjust for there to be no recovery. See in particular Fairchild at 66 [32] per Lord Bingham of Cornhill, 69 [40] per Lord Nicholls of Birkenhead, 73 [56] per Lord Hoffmann and 112 [155] per Lord Rodger of Earlsferry. These views reflected the expression of the matter by Justice (now Chief Justice) McLachlin at the commencement of an article written by her Ladyship in 1998, "Negligence Law - Proving the Connection" in N J Mullany and A M Linden (Eds) Torts Tomorrow: A Tribute to John Fleming (LBC Information Services, Sydney 1998). The foundational legal and moral premise that can be seen in Fairchild and in the introductory comments in the above article is that tort law, as an aspect of the rule of law, is concerned with righting wrongful conduct. If self-evident wrongs (so characterised by legitimate human perceptions) are not recognised by the law's rules, and thus go unremedied, people who legitimately feel themselves victims will be left with a sense of injustice. A legitimate sense of injustice should not be the product of the rule of law. The avowed change to causal principle by the House of Lords that materially increasing the risk of injury was sufficient factual tortious involvement for causation (or attribution of responsibility) to be established was narrowly confined by all their Lordships in Fairchild: at 40 [2] and 55 [21] per Lord Bingham, 70 [43] per Lord Nicholls, 74 [61] per Lord Hoffmann, 91 [108] per Lord Hutton and 118 [170] per Lord Rodger. Crucial to that confinement were factors such as the causal element being singular (only exposure to asbestos) and the inability of medical science to explain cause in terms of a balance of probabilities. Further illumination of the policy-based change to the common law in Fairchild can be seen from the lively debate in the judgments in Barker v Corus as to what was, in fact, decided in Fairchild. At issue in Barker v Corus was the extent of several liability of the wrongdoers who had exposed the plaintiff to the asbestos, causing a material increase in risk of contracting mesothelioma. Though all their Lordships (with a caveat by Lord Rodger: Barker v Corus at 610 [100]-[102]) came to the view that the exceptional approach in Fairchild should extend to circumstances where not all the exposure was tortiously caused by the defendants, a restriction was placed on the principle being that there must be one causative agent: Barker v Corus at 587 [24] per Lord Hoffmann (his Lordship recanting his view in Fairchild that this limitation was unprincipled), 599 [64] per Lord Scott of Foscote, 611 [104] per Lord Walker of Gestingthorpe and 615 [121] per Baroness Hale of Richmond. Save for Lord Rodger, all were agreed that the extent of responsibility of individual defendants should be measured by reference to the extent to which they had increased the risk, based on the respective length and intensity of exposure: Barker v Corus at 589-590 [35]-[36] per Lord Hoffmann, 599 [62] per Lord Scott, 612 [109] per Lord Walker and 616 [126] per Baroness Hale. The majority, recognising that it was justice and fairness that had given rise to the exceptional rule, thought that justice and fairness should limit the defendants' respective liabilities by reference to the wrongful exposure. Lord Rodger dissented on this point - all defendants were liable in full, the change in rule in Fairchild being a relaxation of the rules of causation - thus each caused the damage. At this point, the Parliament intervened with the Compensation Act 2006 (UK), which reflected Lord Rodger's view in Barker v Corus as to the responsibility of defendants in mesothelioma cases, and not the majority's view of fairness. The above discussion of Fairchild and Barker v Corus reveals, at once, the policy questions involved in any conclusion that increasing risk is sufficient for a conclusion of causation or causal responsibility or legal responsibility. Such policy questions are a matter for the High Court, not this Court. 102 Allsop P summarised the current position in Australia as follows, at [22]: …Subject to the views of the High Court in respect of any development of the common law or to the operation of any legislation, it can be concluded that at common law, as a general proposition, the increasing of risk of harm by a tortious act is, alone, insufficient for a conclusion of causation by material contribution to that harm or for a conclusion of responsibility in law for that harm. 103 We respectfully agree with Allsop P. 104 The rule that a plaintiff must establish as a necessary condition of recovery that he or she would not have suffered loss but for the defendant's actionable misconduct is deeply rooted in the policy of the common law that one person should not be liable for the loss suffered by another unless the plaintiff can establish that the defendant's actionable conduct caused the plaintiff's loss. It is not open to this Court to decide that we should no longer adhere to this rule and that a different and "better" rule should henceforth be applied. This Court must proceed on the footing that for Mr Peterson to show that the consumption of Vioxx materially contributed to his MI, in the sense relevant in Australian law, he is obliged to show that his consumption of Vioxx was a necessary condition for the occurrence of the heart attack on 8 December 2003. To say that the consumption of Vioxx was, for example, "in the mix" of possible causes is not enough in this regard. As Beazley JA said in Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307 at 339, the onus of proof of causation "is not discharged by establishing that a particular matter cannot be excluded as a cause of the injury". 105 We conclude that his Honour's ultimate findings of fact are not sufficient, as a matter of Australian law, to sustain the determination of the issue of causation in Mr Peterson's favour. We also consider that the conclusion of ultimate fact necessary to support such a finding is not open on his Honour's findings of primary fact and we now turn to explain why we take that view.

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Causation: Epidemiology as a strand in the proof of causation 106 It is desirable to begin by referring to the legal principles governing the scope of the legitimate use of epidemiological evidence in relation to proof of causation. We begin with the proposition that proof of what may be expected to happen in the usual case is of no value unless it is proved that the particular applicant is indeed "the usual case". In State Government Insurance Commission (South Australia) v Laube (1984) 37 SASR 31 at 33 King CJ said: The use of statistical probabilities in legal proof has been the subject of much learned writing. I need refer only to Glanville Williams, The Mathematics of Proof [1979] Crim. L.R. 297; L. Jonathan Cohen, The Logic of Proof [1980] Crim. L.R. 91; Richard Eggleston, The Probability Debate [1980] Crim. L.R. 678 and the other contributions to the topic in [1980] Crim. L.R. I refer also to Eggleston, Evidence Proof and Probability at p. 40 et seq. In the article referred to above, in [1979] Crim. L.R. at p. 305 Professor Glanville Williams refers to a rule of law relating to proof "that evidence should focus on the defendant". … I am clearly of the opinion that the statistical fact that a particular proposition is true of the majority of persons cannot of itself amount to legal proof on the balance of probabilities that the proposition is true of any given individual. 107 In Seltsam v McGuiness, Spigelman CJ examined at length the significance of epidemiological evidence for the resolution of the issue of causation. He concluded (at [89] and [98]) that epidemiological studies are evidence of possibility which may, alone or in combination with other evidence, establish causation, in a specific case, on the balance of probabilities. Spigelman CJ said at [118]-[120]: The issue in the present case is whether an increased risk did cause or materially contribute to the injury actually suffered. There is a tension between the suggestion that any increased risk is sufficient to constitute a "material contribution", and the clear line of authority that a mere possibility is not sufficient to establish causation for legal purposes. The latter is too well established to be qualified by the former. The reconciliation between the two kinds of references is to be found in the fact that, as in Chappel v Hart and in the cases that suggest the former, the actual risk had materialised. The "possibility" or "risk" that X might cause Y had in fact eventuated, not in the sense that X happened and Y had also happened, but that it was undisputed that Y had happened because of X. The epidemiological evidence in the present case can be expressed in terms of "increased risk". However, in its application to determining causation in the specific case of the respondent that evidence never rises above the level of a possibility. Whether or not the increased risk "eventuated", is the issue which must be determined. The respondent's reliance on the passage from McHugh J was, in my opinion, misplaced. [Emphasis in original]. 108 In Seltsam v McGuiness at [121]-[137], Spigelman CJ reviewed the United States jurisprudence in relation to the legitimate use of epidemiological evidence: The use by American courts of relative risk established by epidemiological studies for purposes of inferring causation in an individual case, is set out in the following extract from the Federal Judicial Centre's, Reference Manual on Scientific Evidence (at 168-169): The civil burden of proof is described most often as requiring the fact finder to "believe what is sought to be proved ... is more likely true than not true" … The relative risk from an epidemiological study can be adapted to this 50 per cent plus standard to yield a probability or likelihood that an agent caused an individual's disease. … The threshold for concluding that an agent was more likely the cause of a disease than not is a relative risk greater than 2.0. Recall that a relative risk of 1.0 means that the agent has no effect on the incidence of disease. When the relative risk reaches 2.0, the agent is responsible for an equal number of cases of disease as all other background causes. Thus, a relative risk of 2.0 implies a 50 per cent likelihood that an exposed individual's disease was caused by the agent. A relative risk greater than 2.0 would permit an inference that an individual plaintiff's disease was more likely than not caused by the implicated agent. A substantial number of courts in a variety of toxic substance cases have accepted this reasoning. 109 Having reviewed the case law in the United States, Spigelman CJ concluded at [135]- [137]: Some of the American cases indicate that the [relative risk] of 2.0 should not be applied as a rigid mathematical formula. Others appear to apply it in that way. The predominant position in Australian case law is that a balance of probabilities test requires a court to reach a level of actual persuasion. This process does not involve a mechanical application of probabilities… In Australian law, the test of actual persuasion does not require epidemiological studies to reach the level of a relative risk of 2.0, even where that is the only evidence available to a court. Nevertheless, the closer the ratio approaches 2.0, the greater the significance that can be attached to the studies for the purposes of drawing an inference of causation in an individual case. The "strands in the cable" must be capable of bearing the weight of the ultimate inference. 110 A difficulty, as a matter of legal policy in the way of adopting the rule of thumb adopted in the United States cases, is that it is apt to mandate an award of compensation to applicants who have not, in truth, been injured by the respondent. That is because those applicants who were actually injured by causes other than the respondent's actionable conduct will be able to recover compensation because, for them too, a relative risk of greater than 2 can be said to imply probability of greater than 50% that the respondent's actionable conduct was the cause of their loss. 111 It should also be borne in mind that, while a relative risk of 2 might imply a 50% probability that the risk has come home in a typical case, a relative risk of less than 2 would imply a probability of less than 50%, that is to say less probable than not. The primary judge's finding of relative risk was of "about 2". And in any event the strength of that finding as a strand in Mr Peterson's case is problematic because of the other candidates as causes of his injury. Further, the absence of a clear appreciation of the level of absolute risk to Mr Peterson from the actionable conduct of Merck and MSDA in comparison with those other candidates detracts from the force of the circumstantial case which he seeks to mount. 112 In Amaca v Ellis at [62], the High Court emphasised that the significance of an epidemiological study depends upon whether the plaintiff is a typical member of the population which is the subject of the study. Their Honours said: As explained at the commencement of these reasons, there being no direct evidence about what actually caused Mr Cotton's cancer, it was the plaintiff's case that the epidemiological evidence established facts which "positively suggest[ed], that is to say provide[d] a reason ... for thinking it likely" that, in exposing Mr Cotton to respirable asbestos fibres, the negligence of each defendant was a cause of his cancer. To draw an inference about causation from what was established by the epidemiological studies, it would be necessary to decide whether the particular case under consideration should be treated as conforming to the pattern described by the epidemiological studies. Absent evidence which suggests that the individual may stand apart from the ordinary, there may be sufficient reason to assume conformity, but whether or not that is so, it is important to recognise that the first step that must be taken, if an inference is to be drawn from epidemiological studies, is to relate the results of studies of populations to the particular case at hand. That step is not inevitable. [Footnotes omitted]. 113 In this case, as has been seen, there was a clear basis for concluding that Mr Peterson does indeed stand apart from the ordinary case. His personal circumstances were such that they afford a ready explanation for the occurrence of his injury independent of the possible effects of Vioxx. The strength of the epidemiological evidence as a strand in the cable of circumstantial proof is seriously diminished by this consideration. The epidemiological studies do not provide assistance in resolving the question whether it was the risk posed by Vioxx, either alone or in combination with the other candidates, which did eventuate in this case.

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The FitzGerald Hypothesis as a strand in the proof of causation 114 As to the FitzGerald hypothesis, it must be understood that the primary judge did not accept that it was valid. His Honour's reference to Professor Harper's evidence, which we have set out at [65] above, suggests reason to doubt the part played by the mechanism described by the FitzGerald hypothesis in the occurrence of Mr Peterson's heart attack. His Honour referred at length to the competing evidence of the cardiologists for whom the validity of the FitzGerald hypothesis was a matter of contention and, in the end, the primary judge did not hold that the FitzGerald hypothesis was valid. There was good reason for his Honour's circumspection in this regard. 115 Importantly, as his Honour acknowledged, there was no scientific evidence of the presence of COX-2 in the endothelium, a phenomenon on which the validity of the FitzGerald hypothesis was dependent. His Honour said at [523]: … I would commence by noting that there is no scientific consensus as to the presence of COX-2 in the endothelium or as to its activity in a situation of atherosclerosis. As noted earlier in these reasons, prostacyclin acts only in the immediate vicinity of its synthesis, which means that, if it were to have an effective anti-aggregatory role in the platelets, it would need to be synthesised in the endothelium at, or closely adjacent to, the point of interest. It seems that, scientifically, whether this is so remains a matter of hypothesis. Further, as his Honour noted at [524]: One piece of pharmacological evidence that would at least have pointed to the validity of the FitzGerald hypothesis would, it seems, have been an increase in the production of platelet thromboxane in response to the inhibition of COX-2 in the context of an inflamed vasculature. However, the researchers who studied this aspect found no such consequence. Profs Zipes and Harper pointed out that that was not conclusive, a proposition which I accept. But the result does add to, rather than reduce, the uncertainty associated with the consequences in the vasculature of inhibiting COX-2 while sparing COX-1. 116 In these circumstances, the primary judge's conclusion in [772] proceeded on the view most favourable to Mr Peterson reasonably open to him, in that this strand of Mr Peterson's case was no more than a plausible account of how Vioxx might possibly have contributed to the occurrence of his MI. 117 As has been seen, the epidemiological studies played an important part in his Honour's ultimate conclusion. Accepting at [767] of the Reasons that "there was no way definitively to determine which risk factor caused the heart attack" and that "[he] may have had the very heart attack which he did have, at the same time and of the same level of seriousness, had he not been taking Vioxx", his Honour said at [768]-[770]: In this state of things, it is perhaps unsurprising that the cardiologists were not agreed on the question whether Vioxx contributed to the applicant's heart attack. Earlier in these reasons, I have set out their respective views on the general question whether Vioxx increased the risk of CVT events, and of [MIs], occurring. As to the applicant specifically, Profs Zipes and Harper expressed the view that the consumption of Vioxx increased the risk of him having his heart attack by a factor of about two. They were asked whether that was the same thing as saying that they believed it twice as likely that the applicant's consumption of Vioxx in fact caused, or in some material way contributed to, the heart attack which in fact took place. Prof Zipes answered as follows: That number comes primarily from the APPROVe trial where the relative risk was around 2. When an individual has multiple risk factors and suffers a [MI] it's very difficult to say one specific risk factor was responsible for the infarct versus the constellation of risk factors all interacting and that summation producing the infarct. I think more likely than not had he not been taking Vioxx he would not have had an infarct at that time but it's difficult to say that Vioxx was the specific cause of that infarct. I think we are dealing with statistics and the likelihood of him having an infarct is increased by him taking Vioxx, so I think to a reasonable degree of medical probability Vioxx played a substantial contributing role. Prof Harper reiterated that, in his view, Vioxx doubled the applicant's risk of having a heart attack. When asked to look at the matter ex-post and to express a view as to whether Vioxx in fact contributed to the applicant's heart attack, Prof Harper said that it was a difficult question, "but if it is more than two times then it's more likely than not that Vioxx contributed to the heart attack". Later in his evidence, Prof Harper revised upwards his estimate of the extent to which Vioxx increased the applicant's risk of heart attack. Looking at the data from APPROVe, he said: There were 21 [MIs] in the rofecoxib group and nine in the placebo group; slightly more than 2:1. That is the data that I would rely on over and above any other data that's been presented. When Prof Harper said that a risk of "more than two times" meant that it was more likely than not that Vioxx contributed to the applicant's heart attack, he was implicitly invoking a rule of thumb that says that if, for example, in two otherwise identical groups of people, the events of interest are twice as numerous in the group taking a particular drug as in the placebo group, we may infer that half of those in the former group who experienced an event would have done so anyway. From this it is said that a relative risk of 2.0 goes no further than to imply that an event which occurred in the drug-taking group is equally likely to have done so as a result of the work of the drug as it is to have occurred in any event. This subject is explained in the judgment of Spigelman CJ in Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262, 280-285. Concluding, his Honour said (at 285 [137]): In Australian law, the test of actual persuasion does not require epidemiological studies to reach the level of a relative risk of 2.0, even where that is the only evidence available to a court. Nevertheless, the closer the ratio approaches 2.0, the greater the significance that can be attached to the studies for the purposes of drawing an inference of causation in an individual case. The "strands in the cable" must be capable of bearing the weight of the ultimate inference. The attribution of a contributory role to Vioxx in the applicant's heart attack, then, came down to an interpretation of the risk data yielded by the various trials and studies and to an opinion as to the relevance of those data to the circumstances of the applicant particularly. Inescapably, this required the cardiologists to form a view as to the validity of the FitzGerald hypothesis. Despite what appeared to be a certain agnosticism about the hypothesis, Prof Harper expressed the opinion that the observed riskiness of Vioxx was due to its effect in the post-plaque rupture vasculature. This was, I consider, an implicit endorsement of FitzGerald. He and Prof Zipes considered that the applicant's consumption of Vioxx increased his risk of having a heart attack by approximately a factor of two (which they derived from APPROVe). Profs Celermajer and Vaughan did not agree. They expressed their conclusion thus: "We do not believe, with a reasonable degree of scientific certainty, that Vioxx played a role in causing [the applicant's] heart attack." When asked by the court what was meant by "reasonable degree of scientific certainty", Prof Celermajer said: We were presented with a binary outcome - it contributed or it didn't. We were not invited to say with what degree of possibility might it have contributed. So when asked to make a binary outcome decision we responded to that by saying we did not. We simply wished to acknowledge that we are not absolutely certain of that because the data themselves are [uncertain] … 118 It may be said that the primary judge's conclusions in [772] reflect a preference for the evidence of Professors Zipes and Harper over the evidence of Professors Vaughan and Celermajer. A number of points may be made here. First, it is clear that his Honour did not find in accordance with Professor Zipes' opinion that it was "more likely than not that had he not been taking Vioxx he would not have had an infarct at that time…" (Reasons at [768]). That his Honour was not disposed to reach a conclusion in those terms may be explicable by Professor Zipes' qualification: "I think we are dealing with statistics and the likelihood of him having an infarct is increased by him taking Vioxx, so I think to a reasonable degree of medical probability Vioxx played a substantial contributory role" (Reasons at [768]). 119 Secondly, it is apparent that, so far as Professor Harper's opinion was concerned, he was invoking the rule of thumb derived from the relative risk of 2.0. A small absolute risk may be doubled without making it a likely source of injury. Doubling a very low absolute risk of an adverse result may produce an absolute risk which itself remains so low that a positive finding of causation on the balance of probabilities would itself be an affront to common sense. In the APPROVe study the absolute event rates for MI were 21 events or 0.69 events per 100 patient years for patients consuming Vioxx, and nine events or 0.27 events per 100 patient years for patients consuming a placebo. 120 The epidemiological evidence meant that it was possible that Vioxx consumption was a cause of Mr Peterson's MI. But there were other candidates as causes of his injury, and the claims of those candidates were strong. Shortly before Mr Peterson commenced taking Vioxx, he was, by reason of his age, gender, hypertension, hyperlipidemia, obesity, left ventricular hypertrophy and history of smoking, a member of a group within the community, 25% of whom were expected by the cardiologists to suffer a heart attack within five years. Mr Peterson may simply have been the unlucky one in four of this cohort to suffer a MI. We are unable to see how it can be said that it is more probable than not that Vioxx, whether alone or in combination with Mr Peterson's personal risk factors, was a necessary condition of the occurrence of his heart attack. 121 Thirdly, Professors Zipes, Harper, Celermajer and Vaughan conferred and provided a joint report to the Court on a number of questions. Question Four was: "Did Mr Peterson have a [MI] in December 2003? If so, what was the aetiology of Mr Peterson's [MI] including the contribution, if any, of his consumption of Vioxx?" The answer of the cardiologists was in the following terms: All agree that he had a large acute anterior ST segment elevation [MI] in December 2003. The aetiology of his heart attack was thrombosis consequent upon a ruptured atherosclerotic plaque in his proximal left arterial descending coronary artery. In a patient with multiple risk factors there is no way to definitely determine which risk factor caused the heart attack. Likewise there is no specific feature to indicate that VIOXX did or did not cause the heart attack. (RH/DZ) - We believe Mr Peterson's consumption of VIOXX increased his risk of having his heart attack by approximately a factor of 2. (DC/DV) - We do not believe, with a reasonable degree of scientific certainty, that VIOXX played a role in causing Mr Peterson's heart attack. 122 Professors Zipes and Harper were referred to as DZ and RH in the joint report. That Professors Zipes and Harper did not go beyond the opinion that Mr Peterson's consumption of Vioxx increased his risk of having his heart attack by approximately a factor of 2 is significant. It puts paid to the suggestions advanced on Mr Peterson's behalf that his relative risk was increased by a factor significantly greater than 2. Further, it can be seen that, unlike Professors Celermajer and Vaughan, Professors Zipes and Harper did not in the concurrent report of the cardiologists express any opinion as to the likelihood that Vioxx did in fact play a role in causing Mr Peterson's heart attack: they confined their evidence in the concurrent report to an increase in relative risk. To the extent that Professors Zipes and Harper were prepared to go further in their oral evidence, there is no evident reason to prefer their more expansive oral evidence over their more circumspect concurrent evidence. At least there is no basis on which this Court could act to make a stronger finding in favour of Mr Peterson than was made by the primary judge. In truth, this strand of Mr Peterson's case was no stronger than the rule of thumb to which the primary judge referred. 123 The interpretation of the epidemiological evidence by Professors Zipes and Harper, who were called on Mr Peterson's behalf, put the relative risk of MI resulting from the consumption of Vioxx at "about 2". That is to say that over the general population those taking Vioxx were about twice as likely to suffer a MI as those who were not. A relative risk figure of 2 can be converted into a statistical likelihood of 50% that Vioxx was causally implicated in the occurrence of a MI. But, as we have said, here there were other candidates as causes of the injury. The strength of this strand of the case did not rise above the possibility that it was "in the mix" of factors which may have caused Mr Peterson's heart attack. 124 As Sir Frederick Jordan said in Carr v Baker (1936) 36 SR (NSW) 301 at 306: "Conjecture may range from the barely possible to the quite possible". We accept that it is quite possible the Vioxx was a necessary condition of Mr Peterson's heart attack. But in the light of the causative potential of the other factors to which we have referred, we consider that a conclusion that Mr Peterson would not have had his heart attack but for the consumption of Vioxx based on the epidemiological studies and the FitzGerald hypothesis, which was itself subject to unresolved objection, is a matter of conjecture rather than reasonable inference on the balance of probabilities. 125 Although the primary judge's findings of primary fact were not challenged in this regard, it was argued on Mr Peterson's behalf, by reference to the relative risk of 9.59 suggested for the most vulnerable members of the population in the APPROVe study, that he was much more at risk than the factor of almost 2. This argument has little force. First, it was not supported by any of the cardiologists: even Professors Harper and Zipes put Mr Peterson's relative risk from Vioxx consumption no higher than about 2, and this was the evidence which the primary judge accepted. Second, the figure of 9.59 in the APPROVe study was generated from an obviously unrepresentative sample. 126 For these reasons we do not consider that it was more probable than not that the consumption of Vioxx was a necessary condition of Mr Peterson's heart attack of 8 December 2003. We note, however, that it does not follow from this conclusion that none of the other applicants represented in these proceedings can succeed in establishing the ingredient of causation in their claims. For example, there may be applicants in relation to whom there is no likely cause of their MI other than the effects of their consumption of Vioxx.

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Causation: Past consumption of Vioxx and the cross-appeal 127 Mr Peterson had originally filed a notice of contention pursuant to which he sought to argue that the primary judge should have concluded that the consumption of Vioxx materially increased the risk of a person suffering a MI if the person had consumed Vioxx more or less continuously in the past, notwithstanding that they had not consumed Vioxx in the weeks immediately preceding the occurrence of such an event. 128 At the hearing of the appeal, Counsel for MSDA noted that this contention was being advanced to support an answer to a question answered by the primary judge in the representative proceedings. Since the contention was being advanced to support a variation in the orders made by the primary judge, it should be supported by a notice of cross-appeal. 129 In response, Mr Peterson sought to file an amended notice of cross-appeal in which it sought to amend his Honour's answer to Question 3 of the Schedule annexed to the Orders dated 18 June 2010. Counsel for MSDA raised no objection on the ground of delay, but submitted that the challenge was bound to fail on the merits. In turn, Counsel for Mr Peterson argued that the issue sought to be raised by the amended notice of cross-appeal did not need to be determined on the basis that the better view was that the primary judge had not determined this issue against Mr Peterson. Counsel for Mr Peterson made it clear that if the Court accepted this argument, it would not be necessary for the Court to determine this aspect of the cross-appeal. 130 Mr Peterson's cross-appeal centred on the primary judge's response to Question 3, namely the physiological mechanism by which the consumption of Vioxx increased the risk of suffering a MI. Mr Peterson took issue with the primary judge's findings in relation to the hypothesis that the development of atherosclerosis by the acceleration of atherogenesis increased the risk of suffering an MI. Mr Peterson contended that, even if the finding that the likely physiological mechanism by which Mr Peterson had his heart attack involved an absence of prostacyclin in the vicinity of the injured artery was overturned, the conclusion that Vioxx was a likely cause of his heart attack was amply supported by other evidence and findings of the primary judge. 131 Mr Peterson also challenged the primary judge's conclusion concerning persons who had consumed Vioxx more or less continuously in the past but not in the weeks immediately preceding the relevant cardiovascular event. He said that the primary judge should have found that the consumption of Vioxx had a long term effect on the risk of an MI and that aggravation of atherosclerosis was, at the least, an additional plausible biological explanation supported by the FitzGerald hypothesis for the strong epidemiological association between Vioxx and MI, both in the long term and in the short term. He contended that the primary judge failed to consider properly or at all: 1. the unanimous evidence of the cardiologists that Vioxx increases hypertension which in turn accelerates atherosclerosis; 2. the cardiological evidence as to the acceleration of atherosclerosis through the incorporation of thrombotic material into plaques; and 3. the epidemiological evidence that established that the cardiovascular risk of Vioxx persisted in the long term after the patient stops taking Vioxx. 132 Mr Peterson submitted before the primary judge that Vioxx promoted the development of atherosclerosis by increasing hypertension and through the incorporation of thrombotic material into the plaque structure. 133 The primary judge's answer to Question 3 of the Schedule was that the physiological mechanism by which Vioxx is capable of causing MI is "the aggregation of thrombotic material in the vasculature as the result of the blocking of the production of prostacyclin by the inhibition of COX-2 in the absence of any blocking of the production of platelet thromboxane". Counsel for Mr Peterson proposed that the description of the mechanism should be amended to read: "the aggregation of thrombotic material in the vasculature as the result of the blocking of the production of prostacyclin by the inhibition of COX-2 in the absence of any blocking of the production of platelet thromboxane, and the thickening of plaque in consequence of clinically silent thrombus formation events". 134 Mr Peterson argued that the primary judge did not, by his answer to Question 3, resolve against him the contention that the mechanism by which Vioxx is capable of causing a MI included the thickening of plaque in consequence of clinically silent thrombus formation events, as a result of the consumption of Vioxx in the past. It is clear, however, from [773] of the Reasons that his Honour did indeed reject that likely mechanism, and that his Honour's failure to mention it in his answer to Question 3 reflected that rejection. His Honour did not refer to it because his Honour did not accept that it was a mechanism. 135 It is not correct to say that this issue was not truly a live issue before the learned primary judge. Mr Peterson advanced this view of the physiological mechanism by which a MI may be caused against the possibility that his evidence, that he had been taking Vioxx up to the date of his heart attack, might not be accepted. That was a live issue in the case which his Honour resolved in Mr Peterson's favour at [775]. 136 Mr Peterson relied upon the results of APPROVe, which demonstrated a relative risk of developing hypertension from taking Vioxx compared to the placebo of 2.02 (1.71, 2.38). He also pointed to the connection between the taking of Vioxx and hypertension, as demonstrated in that study, as well as the significant effect of Vioxx on blood pressure, as demonstrated in the VIGOR study. 137 As MSDA pointed out, it was not in dispute that Vioxx, at certain doses, caused hypertension in some patients to some extent. It shared that characteristic with all of the NSAIDs. It was also not in dispute that hypertension at some level, at some duration and by some mechanism promotes atherosclerosis. MSDA contended that at trial Mr Peterson did not submit that the modest increases in blood pressure, demonstrated by the taking of Vioxx and other NSAIDs, could accelerate atherosclerosis. He did not seek in his own case to prove any effect of his hypertension from the consumption of Vioxx on his own MI. 138 As to the merits of Mr Peterson's cross-appeal, the primary judge's findings of primary fact serve to conclude this argument against Mr Peterson. The primary judge pointed out that the cardiologists agreed that the effects of coxib inhibition on the progress of atherosclerosis data are conflicting. There was also conflicting evidence as to any effect of Vioxx on the positive development of plaque. While there was evidence of hypotheses, there were no data available to support them. The primary judge held (Reasons at [535]) that Vioxx did contribute to hypertension in some people but not to an extent that would put it outside the range of contribution by NSAIDs generally. Mr Peterson referred to the evidence of Professors Zipes and Harper in support of his theory but he did not show why the primary judge was in error in assessing the entirety of the cardiology evidence, including evidence to the contrary, to the effect that the taking of Vioxx reduced plaque formation and therefore reduced atherosclerosis. 139 Mr Peterson submitted that once the primary judge accepted the FitzGerald hypothesis as a plausible biological explanation, he could not reject as implausible the accepted consequence of its operation, namely, the acceleration of atherosclerosis through the incorporation of thrombotic material into plaques. However, the primary judge did not say that the hypothetical consequence was implausible. Rather, he said that the proposition was unsupported by data and that it would be to overreach the science to conclude that Vioxx accelerated atherosclerosis. Mr Peterson did not demonstrate why the primary judge was in error in saying that even acceptance of the FitzGerald hypothesis does not establish the state of affairs in the vasculature for which Mr Peterson contended. 140 Mr Peterson relied on the epidemiological evidence as establishing an association between the consumption of Vioxx and adverse cardiovascular events some time after the termination of the treatment. He contended that the plausible explanation for such an event was the contribution of Vioxx to the development of atherosclerosis. In the absence of establishing that link, the plausibility of the explanation is diminished. 141 The APPROVe data, with an extension to study the follow-up of participants for at least one year post-treatment, established a relative risk of less than 2.0. However, the relative risk for those patients in the high cardiovascular risk subgroup was 2.28. MSDA said that those asserted figures, being drawn from the post-trial study, cited a relative risk that included events in patients both on and off the drug and were therefore not relevant to establishing the risk for patients off the drug. That is, the results mixed patients who had an event on the drug with those patients who had an event off the drug and gave an overall figure which does not demonstrate the point now sought to be made. Further, MSDA pointed out that there was no evidence in the follow up study to support a contention that there was a statistically significant increase of MI in patients after they had stopped taking Vioxx. However, the primary judge particularly noted at [550]: As Prof Zipes pointed out, the debate here involves the question whether Vioxx had not merely an acute effect in facilitating thrombosis but also a longer-term effect of promoting the development of atherosclerosis. For reasons explained earlier, I am not satisfied that Vioxx did have the latter effect. I note also that the follow-up data from the APPROVe trial, to the extent that it related only to the follow-up period as such, showed no statistically significant relative risk of taking Vioxx rather than placebo: see the third table in para 196 above. The conclusions which I reach as to the existence of a plausible biological mechanism for the risk disclosed by the main body of data in that trial, therefore, must be confined to the circumstances of a patient who is taking Vioxx more or less continuously. I deliberately express this conclusion in general terms because I wish neither to anticipate the circumstances of any particular group member in the present case, nor to prejudge the question whether his or her actual pattern of consumption of Vioxx was such as would provide a proper basis to infer the existence of the association for which the applicant contends. 142 Mr Peterson then submitted that the data demonstrated that the relative risk of suffering an MI during the year following the cessation of the taking of Vioxx compared with the placebo, of 1.67 (0.61, 4.59), should be accepted as sufficient to demonstrate causation, despite the fact that he accepted that this does not demonstrate a result that is significant at the 95% confidence level. Mr Peterson submitted that the association "was certainly more likely than not", despite this statistical inconvenience. Mr Peterson provided no basis for the drawing of such a conclusion on the basis of the evidence available. MSDA pointed out that, statistically, such a result demonstrated that the only conclusion is that there is no evidence of a difference. 143 Even if there were a plausible explanation of a Vioxx-induced cardiovascular event by reason of increased atherosclerosis or the earlier taking of Vioxx this alone does not necessitate a finding that the cardiovascular event was caused by Vioxx (Amaca v Ellis). The primary judge did not err in his conclusion that Mr Peterson had not established the causative link. The effect of Vioxx on hypertension was not demonstrated to give rise to an increase in atherosclerosis sufficient to cause Mr Peterson's cardiovascular event. Vioxx does contribute to hypertension in some people, as do other NSAIDs; and hypertension is known to accelerate atherosclerosis. However, this is some way short of providing the necessary causative link, especially where some data established that the taking of Vioxx was associated with reduced plaque formation. 144 His Honour's findings of primary fact are not susceptible to challenge. The evidence to which his Honour referred in these findings justified his Honour's view that he could not conclude that the consumption of Vioxx caused an acceleration of atherosclerosis by the incorporation of thrombotic material into plaques. The evidence which the primary judge was entitled to accept was not sufficient to establish that the taking of Vioxx increased hypertension, which in turn led to accelerated atherosclerosis, which in turn caused increased plaque formation, which resulted in plaque rupture, which resulted in clot formation that caused a cardiovascular event. 145 The primary judge's answer to Question 3 in the Schedule was correct.

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NEGLIGENCE AND SECTION 52 OF THE TPA 146 The primary judge noted at [737] that Mr Peterson's evidence was to the effect that, if he had been told that taking Vioxx would approximately double his risk of heart attack, he would not have taken the drug. In the end, his Honour did not accept that evidence. His Honour considered that Mr Peterson would have taken Dr Dickman's advice and that Dr Dickman would have continued to prescribe Vioxx. This conclusion was decisive against Mr Peterson's claim. 147 In this regard, his Honour concluded relevantly at [864]-[865] and [867]-[868]: What would have happened had an appropriate warning been given to Dr Dickman? That is a crucial aspect of causation in a negligence case based on failure to warn: see eg Rosenberg v Percival. There is a certain artificiality about the task thus presented to the court in a product liability (as distinct from a professional liability) case, particularly where the product was consumed consistently over a period. However, I consider it is necessary to look at the matter as at the time when the duty first arose, and by reference to a hypothetical warning no more categorical than has been held to be the minimum necessary to discharge the manufacturer's duty of care in the circumstances obtaining. I have held that a warning should have been given no later than October 2000, but had it been given to Dr Dickman at any time before 10 May 2001 it would presumably have had the same relevance to his decision to prescribe Vioxx to the applicant on that day. As to the terms of the warning, I have held that the terms of the new paragraph in the Vioxx [PI] inserted in November 2001 would have been sufficient. How would Dr Dickman have responded to a warning in those terms, if given to him by correspondence at some time before 10 May 2001? By then, although Vioxx had been on the PBS for about four months only, Dr Dickman's experience with it had been very positive: see the entries for 30 January, 15 February, 8 March and 20 April 2001 in the list in para 718 above. In the balancing of the considerations that he would have undertaken had he been aware that Vioxx involved an increase in cardiovascular risk…I consider that this positive experience would have made a contribution of some substance. Further, it seems that Dr Dickman regarded the absolute risk rate of CVT events for patients taking Vioxx as disclosed in VIGOR − 1.67 events per 100 patient years − to be low in the circumstances of the applicant, whom he regarded as a "mild to moderate" cardiac risk. With all the problems that the making of a judgment about a hypothetical situation involves, I am persuaded that the most likely response of Dr Dickman to a warning in the terms that I have held to be sufficient would have been to advise the applicant that the increased risk of a cardiovascular event was relatively low. While Dr Dickman would have left the final decision to the applicant, my impression is that he would have placed rather more emphasis upon the benefits of Vioxx and rather less upon the cardiovascular risk. … How would the applicant have responded to the kind of advice from Dr Dickman that I have found would most likely have been given? The applicant described himself as a fairly stubborn person who preferred to reach his own conclusions, rather than accepting someone else's word; and as cautious and safety-conscious. He said that he was "wary of medication". While he was in the Navy, he experienced a bad reaction from having omitted to read the label on some migraine tablets that had been prescribed at twice the strength of those that he had previously taken. This taught him a lesson about reading labels and checking carefully what he was taking. He regarded himself as risk-averse, and would "tend to evaluate the pros and cons before making any important decision". … The applicant respected Dr Dickman and placed store by his advice. He was not in terms asked how he would have responded to news that patients on Vioxx in the VIGOR trial experienced CVT events at a rate of 1.67 per 100 patient-years, but he was asked in chief how he would have reacted to advice that the risk of a heart attack was two, three or four times as high on Vioxx as on naproxen. He said that he would have wanted to know where the figures came from, beyond which he declined to speculate:… Had he asked Dr Dickman where the figures came from, I consider that Dr Dickman would have told him that VIGOR was a trial involving patients with rheumatoid arthritis, that the dose of Vioxx in the trial was double what was then proposed, and, as mentioned above, that naproxen had an antiplatelet action whereas Vioxx did not. As I have said, I consider that Dr Dickman's advice would have been generally favourable towards Vioxx. There was, additionally, the applicant's long and unhappy experience with the gastrointestinal side effects of NSAIDs, which would have provided him with an incentive to opt for a coxib. 148 His Honour also concluded that Dr Dickman was not influenced in his decision to prescribe Vioxx by the representations made by MSDA as to its safety. At [872] his Honour noted the following passage in the cross-examination of Dr Dickman: Dr Dickman was cross examined as follows: It's fair to say that you from at least 2000 onwards proceeded on the basis that no prescription medicine was absolutely safe for every patient?---That's correct. One couldn't proceed that [way], could you?---No. [What] you had to do was to learn about the range of effects of the drug, ranging from good through to serious adverse effects or possible serious adverse effects, and then make a judgment about whether it should be prescribed for the particular patient?---Yes. If a drug representative came to you and said, "Here is a prescription medicine. I can guarantee you that it's absolutely safe", you would shake your head and think, "I think that's an overstatement", wouldn't you?---Yes. Because that doesn't accord with your experience of prescription medications?---No. You would think to yourself, "I had better go and have a look at what I can find out about this drug to see what the safety of it is", wouldn't you?---Yes. You certainly wouldn't just take the rep's word for it, would you?---No. Indeed, whenever a rep made a comment about safety of a drug you knew that it had to be placed in the context of all of the information that was available about the drug?---Yes. These answers were entirely consistent with the impression I had of Dr Dickman generally. In short, I do not think he relied on the emphasis given by MSDA sales representatives as to the safety of Vioxx. Had these statements not been made to him, I am satisfied that he would in any event have prescribed, and continued to prescribe, Vioxx for the applicant. 149 Other members of the represented group may not face the difficulty which Dr Dickman's evidence presented for Mr Peterson's case. For that reason, MSDA appeals against the primary judge's conclusion in favour of Mr Peterson on the issue of breach of duty by MSDA. It is necessary now to address this issue. 150 Mr Peterson's pleaded case of negligence against MSDA was that the consumption of Vioxx materially increased the risk of MI, that MSDA knew or ought to have known of that increased risk, and that MSDA failed adequately to warn of the risk. The primary judge rejected the proposition that MSDA was obliged to give a warning of an increased risk in terms of Mr Peterson's pleaded case. His Honour said at [824]: The imposition on MSDA of a duty to warn in such terms would be problematic in a number of respects. First, the "signal" given by VIGOR was not a consistent one over all of the pleaded cardiovascular conditions. To say that the consumption of Vioxx might have increased the risk of suffering each of those conditions would have been to overreach the results of VIGOR on any view. Secondly, the VIGOR results did not speak at all along the Vioxx placebo axis. The only sense in which they justified a statement about increased risk was with reference to a situation in which the notional comparator was naproxen. Thirdly, the trial was not concerned with, and (as the cardiologists in the present proceeding agreed) said nothing about, a situation in which Vioxx was taken at the recommended maximum therapeutic dose in Australia − 25 mg daily. Fourthly, a warning in such terms as proposed by the applicant would have gone beyond what, as would reasonably have appeared to the respondents, was the prudent scientific consensus in 2000/2001. Here I refer to the views of the FDA Arthritis Advisory Committee expressed on 8 February 2001 − see para 156 above. And fifthly − and perhaps most importantly for present purposes − a warning in the terms proposed by the applicant would have gone beyond what I have held the respondents either knew or ought to have known about the consequences of consuming Vioxx until September 2004. I take the view, therefore, that the availability of the VIGOR results did not oblige MSDA to issue a warranty in the categorical terms proposed by the applicant. 151 His Honour went on, however, to hold that MSDA had, for a time, been negligent and had engaged in misleading and deceptive conduct in contravention of s 52 of the TPA, by reason of a failure to provide an adequate warning about the worrisome signal in the VIGOR results during the period from October 2000 to November 2001. 152 As to the negligence case, the primary judge held at [822] that a warning should have been given after the results of the VIGOR study were available. His Honour regarded the warning given by the amendment to the Vioxx PI in November 2001 as a reasonable warning so far as its content was concerned. In this regard, the primary judge said at [830] and [905]: As a communication addressed to a professional audience, I consider that the new paragraph inserted into the Vioxx [PI] in November 2001 was a reasonable warning of the potential cardiovascular risk disclosed by the VIGOR results. It drew attention to difference in CVT events as between the two arms of the study, and to the fact that the comparator was naproxen. It accurately identified the cohort of patients that had been involved in the trial, and the dose that had been used. It referred to other clinical data where no difference had been disclosed as between Vioxx arms and (non-naproxen) NSAID arms. And it drew attention to the critical biochemical difference between coxibs and non-selective NSAIDs, namely, the absence of any antiplatelet activity in the case of the former. As to this last aspect, it is important to note that the clinical context in which Vioxx might be under consideration was one in which the patient was presumptively suffering from osteoarthritis and would, normally, be in need of an anti-inflammatory drug. The paragraph in the [PI] was such as would draw the prescriber's attention to the difference between coxibs and at least some other NSAIDs, most obviously naproxen, with respect to antiplatelet activity. Whereas all NSAIDs inhibit COX-2 (and, as Prof Celemajer said, are given in doses that achieve that purpose wholly or very substantially), traditional NSAIDs also inhibit COX-1, thereby suppressing, to an extent at least, the aggregation of platelets. Vioxx did not. This was the essence of the distinction between Vioxx and the traditional NSAIDs. It was the distinction which would have been relevant to the clinician; and it was the distinction to which the new paragraph in the [PI] pointed. … For the same reasons, a different conclusion must be reached once the [PI] was amended in November 2001. No longer could it be said that the existence of the original [PI] made MSDA's failure to warn misleading. This is a different point from my earlier conclusion that merely to cause an amended [PI] to be approved by the TGA was not a sufficient warning to doctors. Here the question is not whether MSDA warned: it is whether it misled. It is quite possible to refrain from warning without misleading. Given that the amended [PI] was at large from November 2001, and that it fairly − albeit compendiously − referred to the cardiovascular results of VIGOR, it could no longer, in my view, be said that merely by remaining silent MSDA had engaged in misleading conduct. It is true that the new paragraph in the "Precautions" section did not advert to the [MI] figure from VIGOR as such, but it did refer to the CVT rate as a whole. The 0.5% [MI] figure was part of the CVT figure of 1.67%. The citation of the latter was, in my view, sufficient to absolve MSDA of the charge, made by the applicant, that its failure to advise doctors directly of the [MI] risk signal given by VIGOR was misleading. 153 Having held at [830] that as "a communication addressed to a professional audience, … the new paragraph inserted into the Vioxx PI in November 2001 was a reasonable warning of the potential cardiovascular risk disclosed by the VIGOR results", his Honour concluded at [846], [848]-[849], and [851]-[852]: I do not think that Dr Dickman's evidence travels the distance necessary to justify the conclusion that MSDA was entitled to assume that, as a matter of inevitable course, general practitioners would read the Vioxx [PI] amendment of November 2001. First, he was not challenged directly on the evidence in his witness statement to which I have referred. Secondly, the furthest he was pressed in cross examination was to accept that resources were readily available to him from which he could ascertain which drugs had recently had their [PI] updated: he was not induced to give evidence to the effect that he did keep abreast of such changes as a matter of course. And thirdly, it may be one thing to know which drug's [PI] had recently changed: it would be quite another to be alerted to those changes that involved new precautions on potentially serious side effects. … … Dr Dickman's was the only evidence that usefully dealt with the question of how a general practitioner would respond, as a matter of normal practice, to changes in the [PI] for a particular drug. As appears from what I have written above, I do not think it has been established that MSDA was reasonably entitled to assume that a practitioner would, without specific prompting, necessarily have taken note of the fact that the Vioxx [PI] had been amended, or of the content of the amendment. It was never suggested to Dr Dickman that he had been remiss in not having done so, or was thereby acting inconsistently with the accepted norms of his profession. In the result, his evidence in chief that he would not be aware of a change to a drug's [PI] unless notified about the change stands unchallenged, and is not inconsistent with any oral evidence which he gave. Clearly the making of an amendment to the [PI] should be regarded as a necessary response by a drug manufacturer to the results of a clinical trial which conveyed a signal of risk. However, I do not consider that such an amendment should of itself be regarded as a sufficient response − that is to say, as a sufficient discharge of the manufacturer's duty of care. Absent the manufacturer taking steps directly to inform medical practitioners of the amendments, I do not accept that the manufacturer would be entitled to assume that every such practitioner − including the one directly involved in prescribing the drug for the putative applicant − would inevitably become aware thereof. Thus I would hold that, by doing no more than amending the Vioxx [PI] in November 2001, MSDA had not taken reasonable steps to warn medical practitioners of the cardiovascular risk signal thrown up by the VIGOR results. … Did Dr Dickman in fact come to read, or otherwise to learn of, the new paragraph in the "Precautions" section of the Vioxx [PI] of November 2001? I would find not. Against his evidence in chief that he would not, unless notified, be aware of a change to a drug's [PI], he was cross examined, if I may so observe with respect, rather tangentially to the important question whether he read the new paragraph in the [PI]. He was not asked that question directly. Counsel appeared to be more concerned to discover whether Dr Dickman knew "the ideas encapsulated" by the paragraph (which he did, at some time between 2001 and 2004 − see para 726 above). However that may be, I could not discern in any evidence given by Dr Dickman that, in November 2001 or thereabouts, the amendment to the [PI] came to his attention. I would hold, therefore, that the applicant has made good his case that MSDA failed to warn his treating practitioner of the cardiovascular risk signal from VIGOR of which it had been aware since March 2000. 154 The question is not, however, whether MSDA was, as his Honour put it, "reasonably entitled to assume that a practitioner would, without specific prompting, necessarily have taken note of the fact that the Vioxx [PI] had been amended, or of the content of the amendment" (Reasons at [848]). The question is whether MSDA took reasonable steps to ensure that medical practitioners were sufficiently informed of the worrisome signal which emerged from the VIGOR trial to take it into account in deciding whether or not to prescribe Vioxx. In this regard, it is tolerably clear that Dr Dickman was informed by the means discussed with him in the course of his cross-examination the relevant passage of which is set out at [845] of the Reasons and [156] of our reasons below. 155 MSDA contended that the conclusions adverse to it were reached unfairly; the focus of Mr Peterson's case at trial being upon the adequacy of the warning conveyed by the amendment to the PI, rather than the adequacy of the means by which it was conveyed to medical practitioners. It is not necessary to come to a final view on MSDA's complaint about process because we accept that it is entitled to succeed as a matter of substance. 156 The primary judge's view at [848] that Dr Dickman needed to be made aware of the amendment to the PI in the VIGOR tests by a Dear Doctor letter, sits uneasily with his Honour's references to evidence which shows that Dr Dickman actually referred to the necessary information when prescribing Vioxx for Mr Peterson. At [845] the primary judge said: In his witness statement, Dr Dickman said that he would not be aware of a change to a drug's [PI] unless notified about the change. He was cross-examined about the updating of [PI], but not specifically about this evidence. I should set out in terms what I perceive to be the relevant aspects of that cross examination: So far as you know, is it the position that Medical Director is updated via some electronic means four times a year?---Yes. And such new information as is necessary to be fitted into the program is sent down about four times a year?---Yes. So far as the drugs are concerned, does it give you a note of what drugs have changed?---No, it doesn't. Give you a note if an indication has changed?---No, I don't think so. Prior to having MIMS over the Medical Director software, MIMS would be updated in paper three or four times a year, wouldn't it?---Yes. The updating version of MIMS would only contain those drugs that needed to be updated. Is that right?---Yes. So you would know three or four times a year from your paper copy of MIMS what drugs were being updated, is that right?---Yes. Do you still keep a paper copy of MIMS in your surgery?---Yes. Is that updated four times a year still?---Some of the copies are slower to get to us but I think, yes. But there is a regular updating process which by looking at the index you can see what the drugs are that have been updated, is that right?---Yes. That's one way in which you would be notified about a change, isn't it?---Yes. Another way in which you would be notified about a change would be if a drug representative told you that the drug was now approved for a different indication?---Yes. So, as an example, with Vioxx, it was initially approved for osteoarthritis, it was later approved as an indication for rheumatoid arthritis; that would be made known to you?---Yes. When you came next to prescribe the drug, particularly if it was for someone with rheumatoid arthritis, you would go back to the product information and look to see with respect to that indication what the relevant information was, wouldn't you?---Yes. Of course, you may hear about a change from one of your colleagues. Is that right?---Yes. Or you may get it from one of your other sources of information; a specialist noting that something has changed by changing a prescription, is that right?---Yes. Or through one of the other sources that you have spoken about. Is that right?---That's right. 157 We are unable to see how this passage of cross-examination does not reflect Dr Dickman's acceptance that he did become aware of the change in PI in the manner there discussed. Dr Dickman certainly did not suggest that he was dependent exclusively on "Dear Doctor" letters as a source of relevant information about new drugs. 158 There was other evidence of MSDA's efforts to disseminate knowledge of the potential risk. In this regard, his Honour said at [265] and [268]: In August 2001, Mukherjee (2001) was published in the Journal of the American Medical Association. In evidence are two similar letters, each from MSDA and using the greeting "Dear Healthcare Provider", dated 28 August and 3 October 2001. The letters took issue with the scientific basis of the article with respect to VIGOR. The first letter stated: The reported differences in the incidence of myocardial infarctions (MI) between Vioxx and naproxen in the … VIGOR trial …, which is the main focus of the JAMA paper, can be explained by naproxen's aspirin like ability to inhibit platelet aggregation and reduce cardiovascular events. Unlike some NSAIDs, Vioxx does not inhibit platelet aggregation (a desirable attribute when trying to avoid gastrointestinal adverse events) and would not be expected to reduce cardiovascular events as has been shown with naproxen in the VIGOR trial. The corresponding paragraph in the second letter stated: The main focus of the JAMA article relates to the reported difference in the incidence of myocardial infarction (MI) between Vioxx and naproxen in the … VIGOR trial … An explanation for this difference is based on naproxen's ability to inhibit thromboxane A2 synthesis and platelet aggregation. As a result of this activity, naproxen may reduce the incidence of cardiovascular events in a manner similar to that observed with aspirin. Unlike some NSAIDs, Vioxx does not inhibit platelet aggregation (a desirable attribute when trying to avoid gastrointestinal adverse events) and would not be expected to reduce cardiovascular events. Towards the end of both letters, it was stated: Patient safety is of paramount importance to MSD. We routinely review data from completed studies and clinical use of our products, and consistent with this approach, we will continue to evaluate such data on agents that selectively inhibit COX-2 to enhance our understanding of these medicines and assess the potential value of future trials. These letters were tendered without any comment of substance by the applicant, and without objection by the respondents. They were both on the respondents' list of "final approved pieces". It was, I consider, common ground that they were sent to medical practitioners generally. … The fifth and final letter in this sequence was dated March 2002, and had the purpose of announcing that Vioxx had been approved by the TGA for the symptomatic treatment of rheumatoid arthritis. Amongst other things, the letter stated: In two efficacy studies involving approximately 2,000 patients with RA, Vioxx demonstrated a significant reduction in the number of tender/painful joints and number of swollen joints versus placebo. Vioxx 25 mg and naproxen 500 mg bd showed generally similar efficacy. The landmark VIGOR Study conducted in 8,000 patients with RA showed that serious [gastrointestinal] complications (perforations, obstructions, ulcers and bleeds) were halved with Vioxx, 50 mg od (twice the recommended dose in RA) versus the comparator NSAID, naproxen, 500 mg bd. This letter was also part of the bundle which related to Prof Donovan's evidence, but it was not referred to by him. Rather, it was tendered by the applicant on the basis that it had been provided to him. There was no objection to the tender by the respondents, who accepted that it is what it purported to be. It was on the respondents' list of "final approved pieces". In the circumstances, I am prepared to find that it was sent to medical practitioners generally. 159 In the light of the foregoing, we accept MSDA's submission that the primary judge's conclusion adverse to it on this point cannot stand. Once again it does not follow that other members of the represented group could not make out this element of their case. The circumstances of Mr Peterson's case were specific to him. 160 For the sake of completeness, we note that in relation to Mr Peterson's claim under s 52 of the TPA, his Honour said at [905]: For the same reasons, a different conclusion must be reached once the [PI] was amended in November 2001. No longer could it be said that the existence of the original [PI] made MSDA's failure to warn misleading. This is a different point from my earlier conclusion that merely to cause an amended [PI] to be approved by the TGA was not a sufficient warning to doctors. Here the question is not whether MSDA warned: it is whether it misled. It is quite possible to refrain from warning without misleading. Given that the amended [PI] was at large from November 2001, and that it fairly − albeit compendiously − referred to the cardiovascular results of VIGOR, it could no longer, in my view, be said that merely by remaining silent MSDA had engaged in misleading conduct. It is true that the new paragraph in the "Precautions" section did not advert to the [MI] figure from VIGOR as such, but it did refer to the CVT rate as a whole. The 0.5% [MI] figure was part of the CVT figure of 1.67%. The citation of the latter was, in my view, sufficient to absolve MSDA of the charge, made by the applicant, that its failure to advise doctors directly of the [MI] risk signal given by VIGOR was misleading.

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Negligence and the TGA 161 MSDA also argued that the regulatory regime based on the Therapeutic Goods Act 1989 (Cth) (TG Act) precludes the legal possibility of common law obligations co-existing with the legislation. This argument may be disposed of briefly. It may be accepted that the legislation is concerned to establish minimum safety standards for the availability and use of regulated medicines in the public interest. We are unable to discern in the legislation an intention to abrogate the common law rights of individual consumers. 162 We respectfully agree with the views of the primary judge expressed at [792]-[795]: The respondents' submissions fell a good distance short of persuading me that any such implication should be made. They contained no such rigorous examination of the terms of the TG Act as would be necessary to make good the point. In one respect at least, the submissions overreached the actual terms of the Act. I refer to the proposition that the TG Act provided for "a system for the provision of information and warnings to doctors in a prescribed form". The respondents did not identify where the Act so provided. For my own part, I have been able to find nothing in the TG Act which either mandated or regulated the terms in which a drug manufacturer such as MSDA provided information and warnings to doctors. The effect of accepting the respondents' submission would be that, so long as the manufacturer of a prescription medicine complied in good faith with the system for which the TGA provided, it could never be held to have fallen short in the discharge of its duty of care to consumers. The manufacturer, could, it seems, engage in all manner of negligent promotion, communication or presentation without being exposed to claims of the kind that the applicant now brings. A careless error in the preparation of a particular production batch (ie a snail-in-the-bottle problem) could never be held to constitute a failure to discharge the duty of care. I highlight here, of course, the circumstance that the respondents' point fails to address quite egregious negligent acts of commission. … By placing on the market a product to be consumed by end users, the manufacturer of a prescription medicine, no less than the manufacturer of any other product intended for human consumption, establishes the setting for the creation of the relationship of proximity from which the common law duty of care arises. I would be slow to hold that a law which did not in terms deal with that very subject implicitly qualified the manufacturer's obligation - as it would otherwise be defined by the common law - so as to permit it, in effect, to act less than reasonably in the discharge of the duty, and to act in a way that produced loss or damage, yet to be shielded from claims by injured parties. There is, in my view, nothing unworkable or anomalous about such a manufacturer remaining under an obligation to take reasonable steps to avoid loss or injury to the end user at the same time as being required to comply with the regulatory system for which the TGA provided. The manufacturer's obligation is not, in my view, exhausted upon compliance with the statute - no more so than the motorist's obligation to take care in the driving of his or her vehicle is exhausted upon compliance with road traffic regulations: see Sibley v Kais (1967) 118 CLR 424, 427. For the above reasons, I reject the respondents' point that the steps required in the discharge of their duty of care went no further, as a matter of law, than to participate in the system of regulation for which the TG Act provided. That conclusion does not, of a course, exclude the prospect that, in identifying the steps required in the discharge of the respondents' duty of care, the requirements of that system, and MSDA's compliance with them, might not be relevant under the general law. To the extent relevant, this is a matter to which I shall turn in due course. 163 We reject MSDA's challenge to this aspect of his Honour's decision.

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SECTIONS 74B AND 74D OF THE TPA 164 We turn to Mr Peterson's claim under s 74B of the TPA that Vioxx was not reasonably fit for the purpose for which it was, expressly or by implication, acquired by consumers and his claim under s 74D that Vioxx was not of merchantable quality. The primary judge held Vioxx was not reasonably fit for the purpose implicitly made known to MSDA (s 74B) and, in relation to s 74D, held that Vioxx was not of merchantable quality because it was reasonable for a consumer to expect that a medication for the relief of arthritic pain would not involve a relative risk of MI of 2. MSDA appealed against these findings. For the reasons that follow, we would allow MSDA's appeal in relation to the contravention of both ss 74B and 74D of the TPA. 165 In considering the application of ss 74B and 74D of the TPA (and for that matter, as will later be demonstrated, s 75AC), it is important to recall the following matters that have already been considered in these reasons: 1. The case against Vioxx was circumstantial. 2. There is no medical "signature" for Vioxx which might indicate that Mr Peterson's heart attack was caused by Vioxx: at [8] above. 3. Mr Peterson was at risk of suffering a heart attack quite independently of his consumption of Vioxx: at [86] and [120] above. 4. The primary judge expressly refused to find that Mr Peterson's heart attack would not have happened but for the taking of Vioxx. Indeed, there was no finding that it was more probable than not that the consumption of Vioxx caused or materially contributed to the occurrence of Mr Peterson's heart attack: at [93] above. 5. A conclusion that Mr Peterson would not have had his heart attack but for the consumption of Vioxx based on the epidemiological studies and the FitzGerald hypothesis, which was itself subject to unresolved objection, was a matter of conjecture rather than reasonable inference on the balance of probabilities: at [124] above. 6. At its highest, the epidemiological evidence meant that it was possible that Vioxx consumption was a cause of Mr Peterson's MI but there were other candidates as causes of his injury and the claims of those candidates were strong - age, gender, hypertension, hyperlipidemia, obesity, left ventricular hypertrophy and history of smoking: see [120] above. 7. Therefore, a necessary condition of recovery was absent - Mr Peterson did not and could not establish that he suffered loss or damage by reason of otherwise actionable conduct on the part of MSDA. Mr Peterson did not establish that his consumption of Vioxx was a necessary condition for the occurrence of his heart attack on 8 December 2003: at [104]-[105] above.

[40]

Section 74B 166 Section 74B relevantly provided: (1) Where: (a) a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply; (b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer; (c) the goods are acquired by the consumer for a particular purpose that was, expressly or by implication, made known to the corporation, either directly, or through the person from whom the consumer acquired the goods or a person by whom any antecedent negotiations in connexion with the acquisition of the goods were conducted; (d) the goods are not reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied; and (e) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not reasonably fit for that purpose; the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction. (2) Subsection (1) does not apply: (a) ... (b) where the circumstances show that the consumer did not rely, or that it was unreasonable for the consumer to rely, on the skill or judgment of the corporation. 167 The primary judge held that because he was satisfied that Vioxx approximately doubled the risk of heart attack, Vioxx was not reasonably fit for the purpose implicitly made known to MSDA by Mr Peterson: at [17] above. MSDA's appeal against that holding raised two separate groups of issues - substantive and procedural. We would uphold the appeal on the substantive issues. It is not necessary to consider the procedural questions. 168 It is convenient to deal first with the issues concerning s 74B and fitness for purpose. 169 Actions under s 74B by consumers against manufacturers in respect of "goods unfit for particular purpose" require demonstration of a number of separate elements. First, a corporation in trade or commerce must supply goods manufactured by it to another who acquires the goods for re-supply: s 74B(1)(a). Here, MSDA was a manufacturer, as that term is understood by reference to s 74A of the TPA. The "goods" were Vioxx. The person who acquired the goods for re-supply was the pharmacist or pharmacists who filled the relevant prescriptions. 170 Second, under s 74B(1)(b), a person must supply the goods to the consumer (other than by auction). The supplier does not have to be the person who acquired the goods from the manufacturer. In the present case, a pharmacist was the person who supplied the goods to Mr Peterson. 171 Third, s 74B(1)(c) requires that the goods must be acquired by a consumer for a particular purpose that was expressly or by implication made known to the manufacturer either directly or, in the present case, through the person from whom the consumer acquired the goods. The hinge on which s 74B turns is the purpose for which the consumer acquired the goods, as that purpose (expressly or implicitly) is made known by the consumer, in this case, to the person from whom the consumer acquired the goods, namely the pharmacist. Identification of purpose in s 74B(1)(c) is necessarily a subjective matter: Rasell v Cavalier Marketing (Australia) Pty Ltd [1991] 2 Qd R 323 at 330. In our view, by having a prescription filled by a pharmacist, Mr Peterson implicitly made known that Vioxx was being acquired for the purpose of use as a medication for treatment for arthritic pain without gastrointestinal side effects: cf Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387 at 415-416 and on appeal, Grant v Australian Knitting Mills Ltd (1935) 54 CLR 49 at 59 citing Medway Oil and Storage Co v Silica Gel Corporation (1928) 33 Com Cas 195. 172 The purpose expressly or impliedly made known by Mr Peterson as the purpose for which Vioxx was acquired is not to be understood as including, as a negative element of that purpose, some quality of absolute safety or complete absence of adverse side effect. Indeed, the primary judge expressly rejected Mr Peterson's case that his purpose was to have a drug that did not give rise to a material increase in the risk of suffering life-threatening conditions (Reasons at [943]). No such purpose of acquisition was expressly or impliedly made known by Mr Peterson to the supplier of the goods to him. That the primary judge reached such a conclusion is hardly surprising. It would be, to say the least, unusual for an acquirer of goods to describe the purpose for which the goods are being acquired in negative terms, and liability under s 74B depends upon a consumer making known the particular purpose for which the consumer acquired the goods. Yet despite finding that Mr Peterson did not make known (expressly or impliedly) that he was acquiring Vioxx for a purpose that included it not materially increasing the risk of suffering a life-threatening condition, the primary judge concluded that Mr Peterson's claim under s 74B should succeed. 173 Central to that conclusion was the proposition that Vioxx doubled the risk of Mr Peterson's MI. As has already been shown (see [55]-[56], [111], [119]-[125] above), that proposition should not be accepted. But even if it were to be accepted, it would be of relevance to the application of s 74B only if it were first established that the purpose of acquisition which Mr Peterson made known (expressly or impliedly) was a purpose that was properly to be identified as containing some relevant negative feature or element. Neither at trial nor on appeal was that relevant negative feature or element of known purpose identified with any, let alone sufficient, clarity. In particular, it was not and is not sufficient to observe only that Vioxx was a medication intended for human consumption, and to assert that it then follows that it was impliedly made known to the supplier that a purpose for acquisition of the product was that it should be "safe" for administration or "not dangerous to health". It cannot be presumed in law, and it is not obvious in fact, that Mr Peterson acquired Vioxx for the particular purpose that was or included the purpose of not giving rise to a material increase in the risk of suffering life-threatening conditions. Almost all medications have side-effects. Almost all medications can be contra-indicated for a particular patient or group of patients. The prescription of drugs by a medical practitioner requires experience, skill and training. The patient who has a prescription filled does so relying primarily on the skill and judgment of the prescribing doctor. Questions of dosage and unwanted reactions may be matters for which the patient will look also to the pharmacist. But it cannot be presumed in law, and it is not obvious in fact, that the patient impliedly makes known to the dispensing pharmacist that he or she is acquiring the product that is dispensed for purposes which include some generalised purpose of safety or absence of adverse side-effects. This is reason enough to conclude that s 74B is not engaged. 174 However, it is appropriate here to make some further points about s 74B(1)(d) and (e) of the TPA. Section 74B(1)(d) contains an objective test of reasonable fitness. The manufacturer is liable if the goods are not reasonably fit for the particular purpose identified in subsection (c). The primary judge held that because Vioxx "approximately doubled the risk of heart attack, Vioxx was not reasonably fit for the purpose implicitly made known to MSDA" by Mr Peterson (Reasons at [968]). Observing that there was an increase in risk described as "doubling the risk" does not in this case, without more, demonstrate unfitness for purpose. First, the evidence did not support the finding that Vioxx "approximately doubled the risk of heart attack" for Mr Peterson: see [55]-[56], [111], [119]-[125] above. Second, whether Vioxx was not reasonably fit for purpose as use as a prescription medication for treatment of arthritic pain without gastrointestinal effects is a question of some complexity that is not answered by mathematical comparison of a relative risk. As has already been said, prescription medications are rarely risk free. No doubt that is why they are available only on prescription. 175 There is, however, a further and conclusive reason why this claim should fail. Under s 74B(1)(e), Mr Peterson must suffer loss or damage "by reason that the goods are not reasonably fit for that purpose" identified in subsection (c): Henville v Walker (2001) 206 CLR 459 at [132]; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 at [142]-[143]; and Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [174]. For the reasons stated at [106]-[126] above, we do not consider that it was more probable than not that the consumption of Vioxx was a necessary precondition of Mr Peterson's heart attack on 8 December 2003. A conclusion that Mr Peterson would not have had his heart attack but for the consumption of Vioxx based on the epidemiological studies and the FitzGerald hypothesis, which was itself subject to unresolved objection, is a matter of conjecture rather than reasonable inference on the balance of probabilities. The claim under s 74B was not made out. It is unnecessary to consider the defences under s 74B(2) of the TPA. 176 In relation to s 74B of the TPA, we would uphold MSDA's appeal.

[41]

Section 74D 177 Section 74D relevantly provided: (1) Where: (a) a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply; (b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer; (c) the goods are not of merchantable quality; and (d) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not of merchantable quality; the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction. (2) Subsection (1) does not apply: (a) if the goods are not of merchantable quality by reason of: (i) an act or default of any person (not being the corporation or a servant or agent of the corporation); or (ii) a cause independent of human control; occurring after the goods have left the control of the corporation; (b) as regards defects specifically drawn to the consumer's attention before the making of the contract for the supply of the goods to the consumer; or (c) if the consumer examines the goods before that contract is made, as regards defects that the examination ought to reveal. (3) Goods of any kind are of merchantable quality within the meaning of this section if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to: (a) any description applied to the goods by the corporation; (b) the price received by the corporation for the goods (if relevant); and (c) all the other relevant circumstances. [Emphasis added]. 178 As the primary judge held (Reasons at [971]), many of the questions arising under this section correspond with the questions raised under s 74B. A corporation must supply goods manufactured by that corporation to another who acquires the goods for re-supply (s 74D(1)(a)) and a person must supply the goods to a consumer (s 74D(1)(b)). In the present case, both those elements are satisfied: see [169] above. 179 However, as with s 74B, there is a conclusive reason why action under s 74D must fail. The consumer must suffer loss or damage by reason that the goods are not of merchantable quality: s 74D(1)(d) and see [175] above. For the reasons stated at [106]-[126] above, we do not consider that it was more probable than not that the consumption of Vioxx was a necessary precondition of Mr Peterson's heart attack on 8 December 2003. A conclusion that Mr Peterson would not have had his heart attack but for the consumption of Vioxx is a matter of conjecture rather than reasonable inference on the balance of probabilities. This is reason enough to conclude that s 74D is not engaged. 180 The primary judge found that Question 23 of the Schedule, which asked "were Vioxx tablets not of merchantable quality within the meaning of section 74D of the [TPA] by reason of the fact that the consumption of Vioxx materially increased the risk of suffering the condition?" was not a common question. That is, the answer to Question 23 could not be determined uniformly across the representative class. Although we have already disposed of Mr Peterson's claim under s 74D, it is appropriate for the purposes of the representative class action to make some observations concerning the primary judge's consideration of the last element of Mr Peterson's claim under s 74D - that the goods must not be of merchantable quality: s 74D(1)(c). Under s 74B(1)(c) and (d), the goods must have been acquired for a purpose made known to the manufacturer. If the goods are not fit for that purpose and the consumer suffers loss or damage because the goods are not reasonably fit for that purpose, the manufacturer is liable. Under s 74D, the subjective purpose for which the goods were acquired is irrelevant. The enquiry is whether the goods are fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect, having regard to any description applied to the goods by the corporation, the price received by the corporation for the goods and all other relevant circumstances: ss 74D(1)(c) and (3). The time at which the goods are assessed is the time of supply. The test is objective: Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70]. So much is made clear by the express words of s 74D(2). 181 What then is the position here? The primary judge upheld Mr Peterson's claim under s 74D on the basis that Vioxx was not as fit for the purpose for which goods of that kind were commonly bought as it was reasonable to expect because "they increased the risk of heart attack by a factor of about 2" in the population of the APPROVe study (Reasons at [975]). However, the considerations in s 74D(3) make it clear that an observation that there was an increase in risk "of about 2" does not, in this case, without more, demonstrate unfitness for purpose. 182 We should point out that this does not determine whether Vioxx was of merchantable quality in Mr Peterson's case. It is unnecessary to reach a conclusion on this in light of [178] above. As with s 74B (see [174] above), whether Vioxx was not reasonably fit for purpose as use as a prescription medication for treatment of arthritic pain without gastrointestinal effects is a question of some complexity that is not answered for the purposes of s 74D by a simple mathematical comparison of a particular form of risk. The statute itself recognises that the description of the goods, the price of the goods and "all other relevant circumstances" are to be taken into account in determining what was reasonable to expect about fitness for purpose at the time of supply. 183 We would allow MSDA's appeal in relation to s 74D of the TPA.

[42]

Legislation and legislative history 184 Section 75AD gives individuals the right to be compensated by a manufacturer for loss suffered by the individual as a result of injury caused by defective goods. Negligence is not a necessary element. Section 75AE extends liability for defective goods to loss by a person other than the injured individual. Part VA of the TPA also extends liability for defective goods to loss where defective goods cause damage to, or destruction of, personal property (s 75AF) and real property (s 75AG). We are concerned only with s 75AD. 185 Section 75AD relevantly provided: If: (a) a corporation, in trade or commerce, supplies goods manufactured by it; and (b) they have a defect; and (c) because of the defect, an individual suffers injuries; then: (d) the corporation is liable to compensate the individual for the amount of the individual's loss suffered as a result of the injuries; and (e) the individual may recover that amount by action against the corporation. [Emphasis added]. 186 "Defect" was defined in s 75AC as follows: (1) For the purposes of this Part, goods have a defect if their safety is not such as persons generally are entitled to expect. (2) In determining the extent of the safety of goods, regard is to be given to all relevant circumstances including: (a) the manner in which, and the purposes for which, they have been marketed; and (b) their packaging; and (c) the use of any mark in relation to them; and (d) any instructions for, or warnings with respect to, doing, or refraining from doing, anything with or in relation to them; and (e) what might reasonably be expected to be done with or in relation to them; and (f) the time when they were supplied by their manufacturer. (3) An inference that goods have a defect is not to be made only because of the fact that, after they were supplied by their manufacturer, safer goods of the same kind were supplied. … [Emphasis added]. 187 Section 75AD is in a separate part of the TPA, Pt VA, included in 1992: Trade Practices Amendment Bill 1992 (Cth) (the Bill). Part VA of the TPA introduced into Australia a strict product liability regime based on the 1985 European Community Product Liability Directive (the Directive): Explanatory Memorandum, Trade Practices Amendment Bill 1992 (Cth) (the EM). Part VA was described at [1]-[3] of the EM as follows: It provides a regime of strict liability, whereby a person who is injured or suffers property damage as a result of a defective product has a right to compensation against the manufacturer without the need to prove negligence on the part of the manufacturer. The key concept of the new Part VA … is that a person who is injured, or whose property is damaged, by a defective product will have a right to compensation against the manufacturer of the product. Goods are 'defective' if they do not have the degree of safety which persons are generally entitled to expect in all the circumstances. … The manufacturer can escape liability where it can prove one of a number of defences, the most significant being … that the goods represented the "state of the art". [Emphasis added].

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Defect within the meaning of s 75AC 191 A number of matters should be noted about s 75AC. It is an objective standard based upon what the public at large, not any particular individual, is entitled to expect: s 75AC(1) and Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd (2004) ATPR 42-014 at [186]. Next, it does not require goods to be absolutely free from risk. The level of safety required is that which the community is entitled to expect. Third, "defects" in prescription pharmaceuticals raise their own issues. As was explained in the EM at [21] and [24]: … [T]he court must take all relevant circumstances into account in determining the safety of goods. Safety expectations may also depend on matters such as the nature of the product and community knowledge of that product. For example, there are a number of known negative side effects associated with certain pharmaceuticals and vaccines. It is also generally accepted and known that these side effects cannot be avoided. Such products are known to confer substantial benefits which flow to the wider community at large. The small statistical chance of injury associated with them does not of itself mean that they are "defective". … The role which intermediaries may play in the supply of goods may also need to be taken into account. For example, prescription pharmaceuticals are supplied to the consumer by a qualified pharmacist and only on the prescription of a qualified medical practitioner. Due to the complex nature and effects of these products, complete instructions and warnings may not be provided to the consumer by the manufacturer. However, detailed product information is provided to doctors and pharmacists by the manufacturer so these learned intermediaries are sufficiently informed to be able to decide whether or not it is appropriate to dispense pharmaceuticals to particular consumers. This factor will be relevant in determining whether a pharmaceutical is defective, particularly where a claim of a defect in information provided is made. 192 As the statute expressly provides (reinforced by the EM), goods are "defective" if they do not have the degree of safety which persons are generally entitled to expect in all the circumstances and, in the context of a prescription drug, those circumstances may include the PI and information provided to doctors and pharmacists by the manufacturer. 193 Mr Peterson's case at trial was that there was a defect within the meaning of s 75AC because (1) as a matter of its chemistry and human physiology as reflected in epidemiology Vioxx increased the risk of MI, and (2) MSDA failed to provide adequate warning of that increased risk. 194 The primary judge addressed this issue at [914] as follows: The circumstances to which [Mr Peterson] pointed for the purposes of s 75AC(2) were the following: (a) rofecoxib was a prescription only non-steroidal anti-inflammatory drug; (b) [MSDA] marketed in Australia Vioxx tablets to pharmacists, medical practitioners and other health care professionals as a non-steroidal anti-inflammatory drug for the treatment of arthritis that was safer than other non-steroidal anti-inflammatory drugs in that it was less likely to cause adverse gastrointestinal conditions and reactions; (c) it was reasonable to expect that medical practitioners and other health care professionals would prescribe and pharmacists would supply under prescription Vioxx tablets as a non-steroidal anti-inflammatory drug for the treatment of arthritis; (d) it was reasonable to expect that persons who were prescribed by a medical practitioner or other health care professional and obtained from a pharmacist Vioxx tablets would consume the Vioxx tablets as a non-steroidal anti-inflammatory drug for the treatment of arthritis; (e) it was reasonable to expect that many persons who were prescribed by a medical practitioner or other health care professional and obtained from a pharmacist Vioxx tablets and who consumed the Vioxx tablets as a non-steroidal anti-inflammatory drug for the treatment of arthritis were likely to be elderly and, accordingly, at particular risk of suffering the [pleaded] cardiovascular conditions; (f) in marketing, distributing and/or supplying for sale in Australia Vioxx tablets [MSDA] failed to provide pharmacists, medical practitioners and other health care professionals 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; (g) the packaging and labelling of Vioxx tablets did not contain or carry 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; (h) the Vioxx [PI] did not contain 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 .... 195 The primary judge accepted that items (a) - (d) existed in the present case (Reasons at [915]). His Honour concluded that there was support in the evidence for item (e). For items (f) - (h), in the context of MI, the primary judge held that across a population the consumption of Vioxx did involve an increase in risk, but that the extent of the risk in a particular case would depend on the conditions presumptively existing in the patient's vasculature. So, for example, for a patient in a reasonably advanced state of atherosclerosis, the risk was more pronounced (Reasons at [916]). As a result, the primary judge concluded that "[a]bsent the provision of any information, advice or warning, … the risk … made the safety of Vioxx less than what persons generally were entitled to expect" (Reasons at [917]). The primary judge stated that "the withdrawal of Vioxx from the market on 30 September 2004 implied as much" (Reasons at [917]). 196 It is important to record that the primary judge did not find that persons generally are entitled to expect that all drugs will be free of side-effects. Instead, his Honour held that "persons generally are entitled to expect that, to the extent that a drug is known or believed to have side-effects, or to carry the potential for side-effects (particularly of a serious nature), practitioners will, in whatever terms, and by whatever means, are appropriate, be furnished by the drug supplier with information or warnings sufficient to permit a balanced, cautious and informed judgment to be made" (Reasons at [917]). 197 In the context of the present case, the primary judge held that there was "nothing in the nature of a warning, and no information about the cardiovascular results of the VIGOR trial, were communicated by MSDA to Dr Dickman before at least November 2001" (Reasons at [918]). The primary judge found that until then, the safety of Vioxx (as purchased and consumed by Mr Peterson) was not such as persons generally were entitled to expect (Reasons at [918]). In particular, the primary judge found that the mere amendment of the Vioxx PI in November 2001 was, in the context of all the relevant circumstances, insufficient to make the safety of Vioxx such as persons generally were entitled to expect (Reasons at [921]). His Honour held that the November 2001 amendment to the PI should have been, but was not, communicated to Dr Dickman by a "Dear Doctor" letter. His Honour made that finding on the bases that: 1. The PI in its amended form in November 2001 was an instruction or warning within the meaning of s 75AC(2)(d); 2. In October 2000, MSDA had corresponded with doctors generally including advice about various side-effects which might be associated with the consumption of Vioxx, and various precautions which ought to be observed. An aspect of that advice was that, in certain osteoarthritis studies, the MI rate amongst those taking Vioxx had been less than 0.1 %; 3. At all times that Vioxx was on the market in Australia (see [37] above), MSDA had available information to the effect that, in the VIGOR trial, the MI rate had been 0.5%. Although there may have been a number of legitimate bases upon which MSDA might have proposed that this level of risk was not generally applicable, or was not applicable to osteoarthritis patients, persons generally were entitled to expect that an advice or a warning that conveyed the outcome of the VIGOR trial would have been communicated to medical practitioners by a means no less likely to capture their attention than the means employed in October 2000; 4. The November 2001 amendment to the PI should have been, but was not, communicated to Dr Dickman by a "Dear Doctor" letter; 5. Accordingly, the mere amendment of the Vioxx PI in November 2001 was, in the context of all the relevant circumstances, insufficient to make the safety of Vioxx such as persons generally were entitled to expect. 198 On those bases, the primary judge held that when (after November 2001) MSDA supplied the Vioxx tablets that were ultimately consumed by Mr Peterson, those tablets had a defect within the meaning of s 75AD of the TPA. Although the primary judge did not identify the defect in express terms, it is apparent that he characterised the defect as the risk of Vioxx absent the provision of any information, advice or warning as to this risk (Reasons at [917]). MSDA submitted that the primary judge was wrong to hold that Vioxx had a defect within the meaning of s 75AD(b) as provided by ss 75AC(1) and (2). We reject this submission. 199 By way of cross-appeal, Mr Peterson submitted that his Honour should have found that the defect in Vioxx had been discovered by no later than March 2000 when the results of the VIGOR study were released and provided the signal risk that the consumption of Vioxx materially increased the risk of MI. We do not accept this aspect of Mr Peterson's cross-appeal. It is appropriate to deal with the cross-appeal first. 200 As we have explained earlier in these reasons, we agree with the primary judge that there were difficulties in drawing definite conclusions from the VIGOR study about the risk of MI from the consumption of Vioxx: see [48] above. The difficulties identified included that the views of the experts were not consistent, the VIGOR trial was dealing with very low numbers and experts were offering other plausible causes about the relationship between the increased risk of MI and the consumption of Vioxx. Indeed, in a publication in late 2004, experts expressed that a plausible cause of the apparent excess risk of MI in the VIGOR trial was the combination of some cardioprotective effect of naproxen and "the play of chance". They also said that "[w]hile other mechanisms cannot be discounted, there is currently little evidence in humans to support a prothrombotic effect for coxibs" (Reasons at [385]). Moreover, these conclusions were not supportive of the FitzGerald hypothesis. 201 Notwithstanding these difficulties, the better view is that Vioxx had a defect within the meaning of s 75AC. The defect was one which affected some people, not all. The defect was that in some people, by a mechanism not known and the subject of no hypothesis, it increased the risk of MI and provided no information, advice or warning as to this effect: see [137]-[138] and [198] above. But the conclusion that Vioxx had this "defect" presents two further statutory questions. First, the statute requires that an individual claimant suffer injuries because of the defect: s 75AD(c). As has already been demonstrated, Mr Peterson did not demonstrate that the increased risk affected him, in the sense that the MI he suffered was caused by (because of) his consumption of Vioxx: see [165] above. In other words, Mr Peterson's claim fails at the first hurdle. 202 Moreover, even if Mr Peterson had demonstrated that the MI he suffered was caused by (because of) his consumption of Vioxx (which he did not), the next relevant statutory enquiry would be whether the defect (as it has been identified) was one which, given the state of scientific or technical knowledge at the time when the goods were supplied by MSDA, was not such as to enable that defect to be discovered. It is to that issue we now turn.

[45]

Section 75AK(1)(c) - State of Art Defence 203 Section 75AK(1)(c) of the TPA contained the "development of risks" or "state of art defence" and relevantly provided: (1) In a liability action, it is a defence if it is established that: … (c) the state of scientific or technical knowledge at the time when [the goods] were supplied by their actual manufacturer was not such as to enable that defect to be discovered; or ... The section was based on Art 7(e) of the Directive. 204 The defence in s 75AK(1)(c) was described in the EM at [55]-[56] as follows: It is the objective state of scientific and technical knowledge, not the subjective knowledge of the individual manufacturer, which is to be taken into account. It is only if the defect could not have been discovered by anybody that the manufacturer will be able to succeed. A manufacturer must expect that there may be further scientific or technical advances during the period of testing and production. The manufacturer should therefore satisfy itself that there have been no further technical advances which affect the safety of the goods before putting them into circulation. Similarly, a manufacturer must keep up to date with advances in knowledge after it first puts a product into circulation to ensure that new information is taken into account in the manufacture of subsequent goods, as new information may expose defects in goods. The crucial time is therefore when the alleged defective good which caused the injury was supplied by the manufacturer, not the time at which the manufacturer first supplied goods of that type. 205 The primary judge dismissed Mr Peterson's claim under s 75AD because he found that the state of scientific knowledge at the time of supply was not such as to have enabled the defect to have been discovered: s 75AK(1)(c) of the TPA. As will be detailed below, we agree with the primary judge's findings and conclusions in this respect. 206 The primary judge relied on the factual finding that it was not until September 2004 that the state of scientific knowledge was such as to enable the discovery of the fact that the consumption of Vioxx increased the risk of MI (Reasons at [927]). The primary judge's reasoning which led to the factual finding was as follows (Reasons at [927]): With respect to the state of the art defence advanced by MSDA, it submitted that the defect alleged to have existed in Vioxx was that "Vioxx tablets materially increased the risk of suffering the [pleaded] cardiovascular conditions". MSDA submitted that, while it was not in dispute that there was an hypothesis to this effect during the whole of the period that Vioxx was on the market in Australia, the totality of the scientific evidence did not take the matter further, and "it never rose to the level of scientific knowledge required to enable a defect to be discovered during the relevant period." …I have concluded that it was not until the unblinding of Merck to the cardiovascular data from the APPROVe study in September 2004 that the respondents knew or ought to have known that the consumption of Vioxx increased the risk of the occurrence of cardiovascular events. To that extent, the respondents' submission is well-founded. However, the present question is whether that is one and the same thing as concluding that the defect which I have identified could not have been discovered by reference to the state of scientific or technical knowledge at the time. At the scientific or technical level as such, I would hold that the defect could not have been so discovered. The defect, of course, is the inadequate safety of the goods themselves. Vioxx was unsafe in that sense because it increased the risk of [MI]. However, it was not until September 2004 that that increase in risk could be "discovered" in the sense·of established at the scientific level. Merck was at the forefront of research in this regard (understandably, since rofecoxib was its own molecule). Merck's own knowledge was the state of scientific knowledge to which s 75AK(l)(c) refers. 207 Mr Peterson cross-appealed against the primary judge's orders dismissing the s 75AD claim. Mr Peterson submitted that the defence in s 75AK(1)(c) cannot apply if, at the time of supply, the defect had already been discovered and that the primary judge should have found that the defect in Vioxx had been discovered by no later than March 2000 (see [199] above), when the results of the VIGOR study were released. Mr Peterson submitted that the primary judge's failure to make that finding was because he construed s 75AK(1)(c) of the TPA as requiring that for a defect to be discovered, it had to be established at a scientific level rather than when it is known that there is a real and serious risk that it exists, notwithstanding that it may only be later that the defect can be positively proved to exist at the scientific level. However, the state of scientific knowledge at the time of Mr Peterson's MI was not just the results of the VIGOR study but the conclusions to be drawn from it. This is clear from his Honour's reasons. Mr Peterson's cross-appeal raised questions of statutory construction and disputes as to the factual findings made by the primary judge. His complaints should be dismissed. 208 As recorded at [205]-[206] above, the state of scientific knowledge at the time Mr Peterson took Vioxx was such that it was not demonstrated that Vioxx caused an increased risk of MI. As the primary judge said at [929]: Section 75AK(l)(c) contemplates the existence of a defect capable of being discovered by reference to the current state of scientific or technical knowledge. It is not concerned with the kind of contextual circumstances referred to in s 75AC(2). … The defect was something inherent in Vioxx as a matter of composition. I consider that the intent of s 75AK(1)(c) is that if that defect could not be discovered according to the state of scientific or technical knowledge, the defence should be available, notwithstanding that enough was suspected about the product to activate an implied obligation to give warnings of the kind mentioned in s 75AC(2)(d). That is, the state of scientific or technical knowledge at the time when Vioxx was supplied by MSDA to Mr Peterson was not such as to enable the defect to be discovered. We refer to [35] to [46] above. We agree with these conclusions.

[47]

ANNEXURE A Commonality Question 1. Are any and which of the questions set out below common to the claims of the group members? Answer: Save to the extent indicated in the answers set out below, all the questions are common to the claims of the group members. Materially increased risk Question 2. Is there a physiological mechanism by which the consumption of Vioxx is capable of causing any and which of the Vioxx cardiovascular conditions? Answer: As amended by replacing "causing" with "contributing to the onset of": In the case of myocardial infarction, yes; otherwise, no. Question 3. If the answer to question 2 is in the affirmative, then for each such condition, what is the physiological mechanism? Answer: The aggregation of thrombotic material in the vasculature as the result of the blocking of the production of prostacyclin by the inhibition of COX-2 in the absence of any blocking of the production of platelet thromboxane. Question 4. Did the consumption of Vioxx increase the risk of suffering any and which of the Vioxx cardiovascular conditions? Answer: In the case of myocardial infarction, yes; otherwise, no. Question 5. If the answer to question 4 is in the affirmative, was the increase in risk material? Answer: To the extent that question 4 was answered in the affirmative, yes. Negligence Question 6. If the answer to question 5 is in the affirmative: (a) when, if ever, did the First Respondent ("Merck Australia") first know that the consumption of Vioxx materially increased the risk of suffering the condition? (b) when, if ever, ought Merck Australia have first known that that consumption of Vioxx materially increased the risk of suffering the condition? (c) did Merck Australia 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 tablets? Answer: (a) & (b): Late September 2004. However, Merck Australia was first presented with a worrisome and important signal of potential cardiovascular risk associated with the consumption of Vioxx in March 2000. (c): Yes. Question 7. Did Merck Australia: (a) not owe group members the duty of care alleged; or (b) satisfy the applicable standard of care by virtue of compliance with the relevant legislative requirements referred to in paragraph 61 (a)-(t) of the Defence to Further Amended Statement of Claim and requirements imposed upon it in respect of Vioxx tablets by the Therapeutic Goods Administration ("TGA") pursuant to the powers granted by the Therapeutic Goods Act 1989 (Cth)? Answer: (a) & (b): No. Question 8. Did Merck Australia: (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 63 of the Defence to Further Amended Statement of Claim? Answer: (a) & (b): No. Question 9. If the answer to question 5 is in the affirmative: (a) did Merck Australia fail to make adequate inquiries of the Second Respondent ("Merck Inc") regarding 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 Australia 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? (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? Answer: (a), (b) & (c): No (d): (i) Merck Australia failed to provide adequate information, advice or warning to healthcare professionals generally about the signal of risk referred to in the answer to question 6. Whether that failure was less than reasonable in all of the circumstances is not a common question. (ii) Whether Merck Australia failed to provide adequate information, advice or warning to individual healthcare professionals about the signal of risk referred to in the answer to question 6 is not a common question. (iii) Merck Australia did not fail to provide adequate information, advice or warning to the general public about the signal of risk referred to in the answer to question 6. (e): As to the dissemination of representations to health care professionals who treated or advised individual group members, not a common question. Otherwise, not appropriate to answer. Question 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? Answer: No. Question 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? Answer: No. Section 52 of the Trade Practices Act 1974 (Cth) Question 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? Answer: (a): Not a common question. (b): (i) Merck Australia marketed, distributed and supplied Vioxx for sale in Australia without providing adequate information, advice or warning to health care professionals generally about the signal of risk referred to in the answer to question 6. (ii) Whether Merck Australia marketed, distributed and supplied Vioxx for sale in Australia without providing adequate information, advice or warning to individual healthcare professionals about the signal of risk referred to in the answer to question 6 is not a common question. (iii) Merck Australia did not market, distribute or supply Vioxx for sale in Australia without providing adequate information, advice or warning to the general public about the signal of risk referred to in the answer to question 6. (c): As to the dissemination of representations to health care professionals who treated or advised individual group members, not a common question. Otherwise, not appropriate to answer. Question 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? Answer: Merck Australia's promotional interactions with prescribers were in trade and commerce within the meaning of the Trade Practices Act. Question 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 s 52 of the Trade Practices Act? Answer: As to the conduct identified in answer 12(b)(i): Until 16 November 2001, yes; otherwise, no. Question 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? Answer: (a) & (b): No. Question 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? Answer: (a) & (b): No. Sections 75AD, 74B and 74D of the Trade Practices Act 1974 (Cth) Question 17. Were Vioxx tablets manufactured by Merck Australia "goods" that were "ordinarily acquired" as defined in s 74A(2) of the Trade Practices Act? Answer: Yes. Question 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 s 74B of the Trade Practices Act? Answer: No. Question 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 s 74D of the Trade Practices Act? Answer: No. Question 20. If the answer to question 5 is in the affirmative, were Vioxx tablets defective within the meaning of s 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? Answer: In the absence of any information, advice or warning, addressed to a particular group member or to his or her medical practitioner, to the effect that the consumption of Vioxx materially increased the risk of myocardial infarction, yes. Question 21. If the answer to question 5 is in the affirmative, were Vioxx tablets defective within the meaning of s 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? Answer: With respect to packaging and labelling, not a common question. With respect to the Product Information, the absence of any adequate information, advice or warning therefrom was a circumstance which, together with others, made the safety of Vioxx not such as persons generally were entitled to expect within the meaning of s 75AD. Question 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 s 74B of the Trade Practices Act by reason of the fact that the consumption of Vioxx materially increased the risk of suffering the condition? Answer: Not a common question. Question 23. If the answer to question 5 is in the affirmative, were Vioxx tablets not of merchantable quality within the meaning of s 74D of the Trade Practices Act by reason of the fact that the consumption of Vioxx materially increased the risk of suffering the condition? Answer: Not a common question. Question 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? Answer: No. Question 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? Answer: No. Claim against Merck Inc Question 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? Answer: (a) & (b): Late September 2004. However, Merck Inc was first presented with a worrisome and important signal of potential cardiovascular risk associated with the consumption of Vioxx in March 2000. (c): Yes. Question 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? Answer: (a) & (b): No. Question 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? Answer: (a) & (b): No. Question 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? Answer: (a), (b), (c) & (d): No. Question 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? Answer: No.

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Judgment (47 paragraphs)

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