For a glimpse of why President Bush pressed the case for tort reform so pointedly in the campaign just ended, feature the way the trial lawyers are circling Merck, and possibly Pfizer, too, for two anti-inflammatory drugs that the lawyers contend create higher risks of heart attacks in patients. Our Josh Gerstein caught up last week with more than 300 lawyers, nearly all of them on the plaintiff’s side, gathered for a “Vioxx Litigation Conference” held at the Ritz-Carlton Huntington Hotel & Spa in Pasadena, Calif. In a dispatch he filed for our Wednesday paper, he described some of the lawyers as “nearly exultant.”

The New York Times carried a dispatch on the Ritz conference on the front page of yesterday’s editions. “60 Minutes” is doing a segment, and Fortune’s cover story this week is “Merck’s $27 Billion Heart Attack.” Even before a single legal action has been heard, the episode has destroyed between $30 billion and $50 billion in Merck’s market capitalization, leaving lots of funds of pensions for ordinary working persons and individuals who own the stock a lot poorer. Lawyers in these sorts of cases often walk away with about a third of the judgment in legal fees. The legal fees for plaintiff-side lawyers alone in the Merck case will likely be in the billions of dollars.

It all makes us wonder whether there isn’t a better way of resolving these disputes than private civil litigation. The staggeringly enormous fees for lawyers takes money away not only from the working men and women whose pension funds own stock in these companies but also from the persons or estates on whose behalf the legal suits are filed. It tends to punish companies that take straightforward actions like removing a potentially dangerous drug from the market, giving them incentives to refrain from doing so in the future. And it tends to punish “deep pockets” like Merck and other pharmaceutical companies, who are easier to demonize and more profitable to sue than, say, your family physician or local pharmacist.

It’s not as if doctors or pharmacists bear no responsibility in respect of Vioxx. Or the patients who took the drug. Or insurance companies who put the drug in their formularies, or about the federal Food and Drug Administration, which approved it. No, the drug companies in America make convenient targets. Yet the way things are going companies are going to be more reluctant to release new drugs for fear that they will have dangerous or costly side effects. Investors in Merck and possibly Pfizer may lose a lot of money, and employees at those companies may be laid off. Insurance premiums for doctors and pharmacists could increase. Companies will be more reluctant to advertise drugs directly to consumers, who will be left less knowledgeable about treatments. The courts will be tied up with lots of costly litigation. And lawyers will get richer.

Meanwhile, it is hard to predict which drug or drug company will be struck next with news of unwelcome side effects. The Merck case gives the companies a disincentive to do research on drugs after they are put on the market. Without research, the companies can claim they did not know and could not have known of the side effects.

We’re always skeptical of government bailouts. But it strikes us that, so long as the FDA exists, a strong case can be made for having all companies that have any drugs approved pay a fee of, say, one half of one percent of the drug’s revenues into a FDA drug disaster fund that would compensate victims’ families in the case of an unexpected outcome. It would be kind of like the special master and victims compensation fund created after the attacks of September 11. Such a fund would have the advantage of insulating the drug company shareholders and drug innovators from unexpected liability, awarding a higher percentage of money to victims as opposed to lawyers, and putting scientifically knowledgeable experts instead of overly sympathetic jurors in charge of decisions on who is eligible for compensation and how much they are to be compensated.

These drugs, after all, were created with the intention to heal, not to harm. It is not as though Merck is a fly-by-night operation. It was the most-admired company in American business for seven straight years in the 1980s, according to surveys conducted by Fortune magazine. The American pharmaceutical industry, for all its faults and mistakes, is on the whole an amazing source of lifesaving innovations. If we’re not careful, it will go the way of the tobacco industry, asbestos companies, and other sectors of the American economy that flourished until the tort lawyers got them in their sights. Few politicians have understood this more clearly than Mr. Bush, who said in the third presidential debate, “One of the reasons I’m such a strong believer in legal reform is so that people aren’t afraid of producing a product that is necessary for the health of our citizens, and then end up getting sued in a court of law.”