The verdict in the personal injury case dramatically increases the chances that the floodgates will be opened to more rulings against Merck, which has been sued by 7,500 people claiming they or family members suffered serious side-effects from taking Vioxx. The drug was taken by 20 million Americans before a study last year found that it increased the risk of heart attacks and strokes. Merck pulled Vioxx off the market in late September.
However, the company is being sued in many states across the US over allegations that it was aware of the risk of Vioxx years before it decided to end its sales. In the first of a string of cases which are due to come to court, a jury in Angleton, a small town in Texas, awarded damages at a much higher level than had been expected to the widow of Robert Ernst, a Wal-Mart produce manager, who died in 2001 having taken Vioxx for eight months.
The award included $24m for mental anguish, $229m in punitive damages and other payments. Carol Ernst began to cry when the verdict was read while her team of attorneys jumped up and shouted, "Amen!"
Mark Lanier, a high profile lawyer who led the prosecution's case, said of the jury's decision: "Anyone who said they are too small-town or won't understand, they are crazy. They know truth and they know justice."
The compensation award could be reduced because Texas law caps damages awards. The state's supreme court also has a record of cutting large compensation awards.
Merck said it would appeal. It has denied it misled patients and doctors in general about Vioxx. It has also said it is innocent in the case of Mr Ernst in particular because he died of arrhythmia, or irregular heartbeat, which has not been linked to Vioxx in any studies. Merck's shares slumped more than 8 per cent to $27.90. Analysts believe it could now face 10 years of litigation and could have to pay out anything between $4bn and $50bn to settle all claims against it.
However, yesterday's unanimous decision by the seven men and five women on the jury will increase pressure on the drugs maker to abandon its pledge to fight each case and to try to reach an out-of-court settlement.
"Merck should come to the table and accept responsibility," Mr Lanier said.
The closely-watched case included some embarrassing revelations for Merck, including internal e-mails identifying doctors across the US who raised awkward questions about Vioxx.
On one company document the word "discredit" appeared next to the name of a doctor allegedly deemed unwilling to be swayed about the merits of Vioxx.
In contrast, other doctors enjoyed a lucrative relationship with Merck.
Another document said "Show me the money" next to a doctor's name. Merck had provided the doctor with $25,000 to support a programme to examine treatment of arthritis, Mr Lanier noted.
Merck's witnesses were forced to defend another seemingly cynical practice, which was a game for Merck's sales force called "Dodge Ball". Merck denied the game was a way to teach employees how to avoid damaging questions about Vioxx's safety.
Another trial is set to begin in New Jersey, where Merck is based, next month, and the first federal trial in New Orleans is slated for late November.