When a Texas jury earlier this year returned a $253 million verdict against Merck for the death of a man taking Vioxx, they began to outline the full extent of the catastrophic liability storm that is now battering Merck down to its foundations. The award itself won't stand; Texas law caps corporate liability at a significantly lower amount. But with 7,000 or so more lawsuits to defend against, Merck knows it is facing a challenge unlike any other in the drug business.

The controversy over Cox-2 inhibitors and the stunning revelations and accusations over hidden or discounted trial data has turned a high-powered spotlight onto the entire industry's commitment to safety and full disclosure. As drug developers consider the potential legal fallout, new safety demands have engineered a steady ramping up of new pharmacovigilance programs to monitor the safety of drugs after they hit the marketplace. It has also shed light on the often uncomfortably close business ties that still link FDA expert panels and the industry.

For Merck, Vioxx was one big reason behind a newly-announced $5 billion cost-cutting regimen. But all drug developers have been forced to pay extra attention to safety and transparency or face repeating the cautionary tale in which Merck now plays a dominant role.