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CNN Newsnight Aaron Brown

Jury Rules Against Merck

Aired August 19, 2005 - 22:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

HEIDI COLLINS, CNN ANCHOR: Good evening again everybody. The story is about as old as medicine itself. A treatment comes along and offers hope, then something goes wrong. For millions of Americans with arthritis, and other chronic pain, Vioxx and drugs like it were a godsend, for drug companies, too, not to mention investors who made a fortune. Then patients began dying and people began suing. Today in Texas, the first verdict came down, the first of many.
Here CNN's Allan Chernoff.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This is right. This is right. Amen.

ALLAN CHERNOFF, CNN CORRESPONDENT: A day of vindication for Carol Ernst, the widow who sued Merck while Vioxx was still on the market.

CAROL ERNST, PLAINTIFF: I just know that it was a road I had to run and I had to finish. And I'm glad it's finished. And I'm glad it ended the way it did.

MARK LANIER, PLAINTIFF'S ATTORNEY: It sends the message regardless that drug companies must tell us the good, the bad and ugly about their drugs. They cannot hide behind an almighty dollar and profit sign in an effort to get their money in the bank and not tell us the truth about their drugs. That won't be allowed in this country. It's not right.

CHERNOFF: 59-year-old Bob Ernst, a Wal-Mart manager completed a 60-mile bike ride with his wife only eight days before dying in his sleep. Merck attorneys argued, Ernst could not have been a victim of Vioxx. The coroner's report says died of an arrhythmia, an irregular heartbeat, not a heart attack or stroke which studies indicated Vioxx could trigger. But during the trial, the coroner testified Ernst could have had a heart attack that led to the fatal arrhythmia.

MARCIA ROBBINS, JUROR: We looked at all the evidence. We thought about what we had seen, what we had heard and it was just about putting everything all together.

CHERNOFF: Jurors said Merck did a poor job in labeling Vioxx, failing to warn doctors and patients of its potential risk. But Merck maintains it acted responsibly, even telling the Food and Drug Administration of potential cardiac danger before receiving confirmation from clinical trials. Merck says it will appeal. JONATHAN SKIDMORE, MERK ATTORNEY: There's no reliable scientific evidence in this case that Vioxx had anything to do with Mr. Ernst's tragic death.

UNIDENTIFIED MALE: We believe strongly in our defense on this case. And this case isn't over yet.

CHERNOFF: The jury awarded Carol Ernst $253 million, but Texas law limits punitive damages. And her attorney acknowledged the court will reduce the amount.

It was costly for Merck to pull Vioxx. The drug had sales of more than $2 billion a year. But now, Merck could face a far greater penalty.

(on camera): The company already is confronting about 4,000 Vioxx lawsuits. Legal experts say many more will now be filed, and Merck's liability could extend well into the billions of dollars.

Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

COLLINS: And Marsha Robbins is with us now in Angelton along with fellow juror Rhonda Wade. So glad that you could both be with us tonight. Thank you guys. The verdict today a lot of people wondering what the mood of those deliberations was. Could you tell us a little bit about that, Marcia?

MARSHA ROBBINS, VIOXX JURY FOREWOMAN: The mood of deliberations? I would say pretty much we were very, very busy trying to look at all the evidence that we had to help us to make up our minds to what our verdict was going to be. Everyone was very attentive, very interested. And we had a lot of questions. And a lot of things that need to be answered. And the only way we could do it was to look at the evidence that we had.

COLLINS: How do you feel about it now, after the decision was made?

ROBBINS: I feel like we made the right decision and the only decision we could make.

COLLINS: How long did it take?

ROBBINS: Well, let me see, I think we deliberated all day yesterday, and then today, probably until about 1:00, 1:30, around there.

COLLINS: Rhonda, let me ask you, were you trying to send a message to the drug companies? I mean, so many times we hear about, you know, the little guy winning over the big guy. I mean, this is a big drug company, a lot of money awarded to this victim.

RHONDA WADE, VIOXX JUROR: Our award was based on the fact that once they figured out they had no choice to make the label change, they chose to stall it in order to make as much as $229 million. And we don't want them to stall. We want them to tell us the truth, and be responsible.

COLLINS: Is that what convinced you then, that Vioxx had certainly done wrong in your mind?

WADE: Looking through their evidence, and time after time, you could see where they knew about the CV events and how important it was and they didn't do anything about it. That's what made up my mind.

COLLINS: I said Vioxx, obviously the parent company there Merck. Do you think that company, Merck, possibly underestimated the public sentiment here?

WADE: Yes.

COLLINS: How so?

WADE: I think that the public wants to know the truth, so that they can make up their own mind.

COLLINS: So in your mind, which to you made a greater impression: the problems with Vioxx, the problems with this drug itself, or the fact that Merck knew about them long beforehand?

WADE: Definitely the fact that they knew. That made my final decision. When I started going through the evidence from the defendants, and the plaintiffs, and seeing it time after time in their Merck documents, that's what made up my mind, that they knew, and they didn't do anything about it.

COLLINS: Marsha, let me get back to you for just a moment. Does it bother you, or do you think now, after this first case has been settled, so to speak, that these drugs did help quite a few people? I think that's a fair argument. But now, this drug is no longer available to those same people.

ROBBINS: Let me say I do know that it did help a lot of people, and a lot of people really liked the drug. I think the problem I had was not so much with the drug itself, but with the fact that all the information wasn't given to the people, so that they could make an educated decision on whether or not it was worth the risk for them to take that drug.

COLLINS: Did you think about your own health care? Or any of the drugs that you may have taken through your life as you were going through this decision-making process?

ROBBINS: Of course. I thought about that perhaps I need to be more careful, and try to learn more about the things that medications that I do take or would take.

COLLINS: I'm sure that's what a lot of people are thinking tonight. That verdict once again coming down 10-2 in favor of the victim. Thanks so much, ladies, for being with us tonight. Marsha Robbins and Rhonda Wade, appreciate your time. WADE: Thank you.

ROBBINS: Thank you.

COLLINS: The verdict today is part of a larger story that goes beyond the cost of dollars and human lives. It touches on how drugs are designed and then marketed. Critics of the present system come in all stripes. One of the toughest is on the inside. As you might imagine, it's a lonely place to be. Here's CNN's Valerie Morris.

(BEGIN VIDEOTAPE)

VALERIE MORRIS, CNN CORRESPONDENT (voice-over): Dr. Peter Rost is on a mission to fight the sky-high cost of prescription drugs in America.

DR. PETER ROST, V.P. OF MARKETING, PFIZER: This is about creating change. This is about creating a better environment. And it's doing something that is helpful not to the privileged, not to the wealthy, but to the poor, to the uneducated, to the uninsured, to the people who cannot defend themselves.

MORRIS: Rost has an idea on how to make drugs more affordable.

ROST: To get reimportation legalized, to have a better health situation for the people in this country.

MORRIS: Reimportation means bringing American drugs sold more cheaply in Canada and Europe back to the U.S. to sell at those same lower prices. Drugs are cheaper in those markets, because of government price controls. Rost and other critics charge the drug industry is placing profits ahead of patients.

But what makes Rost unique among those critics is that he works for the world's biggest pharmaceutical company, Pfizer, where he earns more than $500,000 a year as a VP of marketing.

(on camera): You're supposed to be involved in the marketing of drugs, and helping Pfizer to do what any business or industry does, and that is to make money. Where did the disconnect come?

ROST: Well, I wish there wasn't a disconnect, because clearly, my job is to make money. And I believe there is a win-win situation here. I believe that the drug industry is actually making a historical mistake right now, when it comes to their position on reimportation.

MORRIS (voice-over): The pharmaceutical industry argues that higher prices in the United States are necessary to finance the development of those drugs, and new ones. It says America's free market system is what makes the U.S. the world's biggest producer of new drugs.

BILLY TAUZIN, PRESIDENT, PHRMA: In America, we respect the right of the marketplace to encourage and reward innovation and discovery. Unfortunately, other countries don't do that, and they get away with it because of treaty agreements that allow them to regulate the price.

MORRIS: Rost maintains even with the lowest prices in the U.S., profits for the pharmaceutical industry would still cover research and development costs, and then some. He also believes in the long run those lower prices will be off-set by much higher sales.

Pfizer says it opposes reimportation, because, quote, "the FDA says they cannot permit it, because there's no means to safely inspect and monitor drug supply from outside the country. The system in Europe that he's talking about is a legalized system that's been in place for 20 years. And the medicines that are imported into the U.S. today won't fall into that framework."

So how did this highly-paid drug company executive turn against his own industry? There was no epiphany moment, Rost says. Last August, he wrote a positive review of a book highly critical of the industry.

ROST: When I started out, I didn't know that there would be so much attention.

MORRIS: He continued his criticism in testimony before Congress, newspaper opinion pieces, and on "60 Minutes."

Rost says Pfizer has isolated him in response to his public comments. He says he's been given no work to do, and, while 75 people used to report to him, none do now.

Uncomfortable at the office, Rost says he spends most of his time working from home, but he hasn't been fired.

(on camera): How long can you continue this exiled, well-paid, outspoken position?

ROST: Well, Pfizer is the party that is in control. I'm not in control. I'm an employee. I need my salary to support my family, and it's not like I've had a lot of job offers coming by lately. So I don't truly have much of a choice. Pfizer is the one making the decisions.

MORRIS (voice-over): Pfizer would not agree to an on-camera interview, but in a statement told us, quote, "we're not able to comment on any aspects of his employment and the future. He definitely still is an employee."

(on camera): No one calls you from Pfizer?

ROST: No one.

MORRIS: How long has it been since you've spoken with someone at Pfizer?

ROST: Well, sometimes we have had e-mail interactions, but quite frankly, since my supervisors told me that I didn't report to them, I don't think I've heard from anyone at Pfizer. MORRIS (voice-over): Despite the fallout, Rost says he has no regrets. He hopes that, in this increasingly global economy, drugs can more freely move across borders, like so many other products, and that people can get the best price possible, no matter where they are.

ROST: I very strongly believe, in the end, in a few years, people are going to look back and say, "this guy was right."

MORRIS: Valerie Morris, CNN, New York.

(END VIDEOTAPE)

COLLINS: To give you a better idea of what's at stake for Pfizer, Merck, and for all of us, consider this: Merck today lost nearly $5.2 billion in market value. These are companies that pay high wages, spend big money, and come into our lives in a big way. It is a huge business story, and something else yet again. CNN's Ali Velshi joins us now with more on all of this.

So what does this mean, Ali? I mean, does the verdict really change anything for people who buy drugs?

ALI VELSHI, CNN CORRESPONDENT: Well, I think as one of the jurors you spoke to said, it changes the way people might think about the drugs that they actually take. But it changes the way people look at some of these drug companies. For better or worse, it's in people's minds now that Merck's Vioxx causes heart attacks, whether that's true or not, whether it causes more heart attacks than another drug that people take to kill pain, it's just bad press, and these companies have been some of the most profitable, richest companies in the history of the world, and all of a sudden, they're painted as evil. It's got to be tough for them. They've got to restrategize how they market to people.

COLLINS: Is Merck going to exist anymore? I mean, I'm looking at some of this stuff that their liabilities could range anywhere between $8 and $25 billion.

VELSHI: Companies have been put out of business by liabilities, by big lawsuits. And we're talking numbers in liability that are bigger than the entire value of your company. Merck has got to be having some very serious thoughts tonight about whether they want to go on with these 4,000 cases that are in front of them.

COLLINS: This wasn't even supposed to be one of the strongest cases.

VELSHI: This was not going -- exactly. There are cases out there that might well be stronger. Merck might want to sit there and do what some other drug companies have done in the past with big settlements, and say -- and design a settlement, as opposed to try and go to court for all of these. It's not even worth the press.

COLLINS: Your best guess, why didn't Merck change the labeling?

VELSHI: Because in the drug industry, it means admitting something that you may not want to admit. That's tough. They would have taken a big hit if they had done that, but they made the wrong decision at that point, and this is what got forced upon them, unfortunately.

In the end, if they had changed the labeling, if they had done things more like Pfizer had, the drug would have been out there. There are risks to all sorts of drugs, and some of them are very, very well known. These cholesterol-lowering drugs, erectile dysfunction drugs. They all have associated risks, and individuals weigh those risks against the benefits.

COLLINS: Yeah, but it's almost like you have to become the medical doctor to a certain degree or the scientist yourself, in order to make sure that, OK, is this drug right for me. How can we do that?

VELSHI: It takes a billion dollars on average to get a drug from inception to the point where it's marketed. This goes through the drug company, the FDA, your doctor, and then to you. People have an expectation that a drug is safe when it gets to them. It may not be, but they have the expectation that it is. And that's the tough part to swallow here. And I think some of those jurors might have been just a little angry that they knew that Merck knew.

COLLINS: Of course, and then whose ultimate responsibility is it as far as drug safety goes? I mean, do we hold the FDA responsible?

VELSHI: That's a really good question. Because today's ruling said that those jurors hold Merck quite responsible for this. In fact, it is the FDA, it is -- it is Merck. It is your doctor, and it is you. It is about learning and reading those ridiculously long stacks of information that sometimes come with your medication.

This is a shared responsibility. You put something in your body, you might want to know a lot about it.

COLLINS: Managing your own care.

VELSHI: Managing your own care.

COLLINS: That's what we've got to work on. All right, Ali Velshi, thanks so much for that.

VELSHI: Good to see you.

COLLINS: Coming up on the program, how prepared is the country and the world for a flu virus that kills? Right now, at about quarter past the hour, time for other headlines from Erica Hill in Atlanta. Hi, Erica.

ERICA HILL, CNN HEADLINE NEWS ANCHOR: Hi again, Heidi.

We actually start off with a story that probably is going to come as a shock to a lot of people. The United States held meetings with the Taliban to have Osama bin Laden expelled from Afghanistan. Now, this comes to us according to newly declassified documents from the State Department. The meetings took place after cruise missile attacks in 1998 failed to kill the al Qaeda leader.

In Germany, a court has acquitted Munir El-Motasaddiq (ph) of being an accessory to murder in the 9/11 attacks, but it convicted him of belonging to a terrorist organization. The Moroccan was sentenced to seven years in prison.

Senate Minority Leader Harry Reid says he's feeling fine after a mild stroke earlier this week. The 65-year-old was home in Nevada at the time, and underwent tests, but never went to the hospital.

Seven-time Tour de France winner Lance Armstrong facing a competitor of a different caliber tomorrow. He's going to take a ride with President Bush in Texas. Armstrong has praised the president's biking, but says, no surprise here, the president couldn't beat him, Heidi. He can try, though.

COLLINS: Well, he'll probably try, that's for sure.

HILL: Give him a little run for his money. You never know.

COLLINS: That's right. Erica, thanks so much.

Much more ahead on the program tonight, starting with a strain of influenza that is not just a touch of the flu.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE (through translator): It was so hard to breathe. My chest hurt so much. I thought I was going to die.

COLLINS (voice-over): She almost did, and millions more could. What's being done about an epidemic in the making and will it be enough?

Also tonight, weapons of mass destruction, Iraq and intelligence.

UNIDENTIFIED MALE: It was anything but an intelligence document. It was, as some people characterized it later, sort of a Chinese menu from which you could pick and choose.

COLLINS: The inside story of what went wrong from the insiders themselves.

Later, a shot across the bow. American warships come under attack. Was al Qaeda behind it?

And a much sweeter story.

DYLAN LAUREN, DYLAN'S CANDY BAR: This is our body shake, it's a milk bubble bath chocolate.

COLLINS: A company that Willie Wonka would be proud to call his own.

LAUREN: An homage to candy.

COLLINS: No need to sugar-coat it; this is NEWSNIGHT. + (END VIDEOTAPE)

(COMMERCIAL BREAK)

COLLINS: A former aide to Colin Powell has said his part in the weapons of mass destruction speech to the United Nations was the secretary's lowest point in his life. On February 5th, 2003, the then secretary of state told the U.N. Saddam Hussein had those weapons and intended to use them.

Colonel Lawrence Wilkerson, who reviewed the intelligence, says he wishes he'd never been involved. His story and the larger story of what went wrong will be featured on a special edition of "CNN PRESENTS" this Sunday at 8:00 p.m. Eastern. The program is called "Dead Wrong." Here's David Ensor with a sample.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN CORRESPONDENT (voice-over): Secretary of State Colin Powell will make the case for war in a speech to the United Nations.

COLIN POWELL, SECRETARY OF STATE: We also have satellite photos that indicate that banned materials have recently been moved from a number of Iraqi weapons of mass destruction facilities.

ENSOR: Powell will put America's credibility and his own on the line.

COL. LAWRENCE WILKERSON, FORMER CHIEF OF STAFF TO POWELL: So he came through the door that morning and he had in his hand a sheaf of papers and said "This is what I got to present to the United Nations according to the White House and you need to look at it.

ENSOR: Colonel Lawrence Wilkerson, Colin Powell's long-time friend and adviser, was his chief of staff.

WILKERSON: It was anything but an intelligence document. It was, as some people characterized it later, sort of a Chinese menu from which you could pick and choose.

ENSOR: At the CIA, Powell and his aides questioned point by point, the menu of charges drafted by the White House.

WILKERSON: There was no way the secretary of state was going to read off a script about serious matters of intelligence that could lead to war, when the script was basically un-sourced.

ENSOR: For four days and four nights, in the conference room next to Tenet's office, they argue over the intelligence.

JOHN MCLAUGHLIN, FORMER CIA DEPUTY DIRECTOR: Secretary Powell asked a lot of questions, expressed skepticism about some, was reassured about others, if he was deeply skeptical, it came out. If we were deeply skeptical, it came out. WILKERSON: And then he turned to the DCI, Mr. Tenet and he said, "everything here, everything here you stand behind?" and Mr. Tenet said, "absolutely, Mr. Secretary." And he said, "well, you know you're going to be sitting behind me tomorrow. You're going to be sitting right behind me, in camera."

POWELL: What we're giving you are facts and conclusions based on solid intelligence.

ENSOR: For more than an hour, Secretary Powell displays photos, holds up a chemical vile that suggests anthrax, shows slides, all to make dozens of claims about Saddam's weapons of mass destruction.

POWELL: I am no expert on centrifuge tubes, but as an old Army trooper I can tell you a couple of things.

UNIDENTIFIED MALE: Every single thing we knew was thrown in to that speech. This is all we got and we're making these firm judgments?

POWELL: One of the most worrisome things that emerges from the thick intelligence file we have on Iraq's biological weapons, is the existence of mobile production facilities used to make biological agents.

ENSOR: He makes a dramatic accusation: Saddam has bioweapons labs mounted on trucks that would be almost impossible to find.

POWELL: We have firsthand descriptions.

DAVID KAY, FORMER CHIEF CIA WEAPONS INSPECTOR: In fact, Secretary Powell was not told that one of the sources he was given as a source of this information had indeed, been flagged by the Defense Intelligence Agency as a liar, a fabricator.

POWELL: To find even one of these 18...

ENSOR: Powell was also not told that the prime source, an Iraqi defector codenamed "Curveball," had never been debriefed by the CIA.

LARRY JOHNSON, FORMER CIA STATE DEPT. COUNTERTERRORISM: Maybe the name of the agent wasn't alarming enough, maybe it should have been "Screw-up" or, you know, a "Lying Sack of Manure," something like that, but you know, to know that you're giving the president a ticket to go to war, based upon one source, at that point, you want to drag the source in and talk to him yourself.

KAY: "Curveball" is a case of utter irresponsibility and a good example of how decayed the intelligence process has become.

ENSOR: The day before Powell's speech, a CIA skeptic had warned about the defector's reputation as a liar. In an e-mail reply, his superior acknowledges the problem, but adds "this war is going to happen regardless. The powers that be probably aren't terribly interested in whether 'Curveball' knows what he's talking about."

POWELL: The United States will not and cannot...

ENSOR: Powell was not told about the e-mail.

POWELL: Leaving Saddam Hussein in possession of weapons of mass destruction for a few more months or years is not an option not in a post-September 11th world.

ENSOR: The speech would turn out to be riddled with misleading allegations, but at the time, the press plays it as an overwhelming success.

WILKERSON: He had walked into my office musing and he said words to the effect of, "I wonder how we'll all feel if we put half-a- million troops into Iraq and march from one corner of the country to the other and find nothing."

ENSOR: "I will forever be known as the one who made the case," Colin Powell now says. "I have to live with that."

WILKERSON: I look back on it and I still say that's the lowest point in my life. I wish I had not been involved in it.

ENSOR: March 19th, 2003, the aerial bombardment of Iraq begins. It is the first preemptive war on this scale, in U.S. history.

(END VIDEOTAPE)

COLLINS: To be clear, as you just saw on David's story, it was former Secretary Powell's aide Colonel Wilkerson, who said this time frame was the lowest point in his life. Again, "CNN PRESENTS:" "Dead Wrong: Inside An Intelligence Meltdown." The program airs Sunday night at 8:00 p.m. Eastern, right here on CNN.

Coming up on the program now: Birds now and people next. Are we ready for what could be the worst and deadliest flu outbreak in 80 years?

And later: When is a space shuttle just another passenger up in first class? From New York, this is NEWSNIGHT.

(COMMERCIAL BREAK)

COLLINS: Somewhere in Asia, perhaps someday soon, a pig will catch the flu from a duck or a chicken. The virus will mix from another strain that the pig caught from a former. From it will emerge a third strain, a new one, a strain that travels like human flu and kills like bird flu. The world hasn't seen anything like it for years. And many believe the world isn't ready for it now. Two reports now, starting with CNN's Sanjay Gupta.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT (voice-over): The year was 1918. A virus wreaked havoc on populations around the world. Close to 40 million people lost their lives to influenza.

But Karen Wilbur survived.

KAREN WILBUR, 1918 FLU PANDEMIC SURVIVOR: It was so bad that many of the houses had the caskets lined up on the porch.

GUPTA: Eighty-seven years later, a different strain of the flu threatens once again. It's known as strain H5N1, for avian influenza. For now, it is rare, but make no mistake. It is very deadly, killing the Hong Kong government says, almost two-thirds of people infected.

In some ways, 10-year-old Hong An is a modern-day Karen Wilbur. She is one of more than 50 people in Southeast Asia to catch the virus, and one of only a handful in Vietnam to have survived.

HONG AN, AVIAN FLU SURVIVOR (through translator): It was so hard to breathe. My chest hurt so much, I thought I was going to die.

GUPTA: She got avian flu from her pet duck. Others got the virus from chickens or geese.

In South Asia, they all had one thing in common. They depend on these animals for companionship, for food, or as a means to make a living.

Avian flu itself is not new. It has been around for over a century in these animals. But it's only within the last decade that humans have gotten sick from the virus. Experts worry that this is a sign of genetic mutation and say if human-to-human transmission becomes possible, that could be the start of another worldwide pandemic.

DR. KLAUS STOHR, WORLD HEALTH ORGANIZATION: This virus can change, can mutate, and then acquire the capacities for rapid, sustained, permanent human-to-human transmission without the animal reservoir. That virus will travel around the world in less than six to eight months.

GUPTA: But this is not 1918. The same technology that allows humans to travel so quickly around the globe also provides better medicine and better protection. Most scientists agree that a repeat of the catastrophic losses of 1918 is unlikely.

Thanks to rapid treatment, Hong An's bout with avian flu has come and gone. She has come back to the hospital for a checkup, but her mother still worries. An gets tired very easily, doesn't eat much, and isn't doing as well in school.

THANH CHAU, HONG AN'S MOTHER (through translator): When we heard it was avian flu, we didn't think she'd survive. We started making plans for her funeral. When she recovered, we thought we were the luckiest people ever.

GUPTA: Dr. Sanjay Gupta, CNN, Atlanta.

(END VIDEOTAPE)

COLLINS: One of the staffers on the program has a grandfather who lived through the last great flu pandemic in 1918. Two of his brothers did not. Multiply that by 20 million, perhaps even 50 million and you begin to see what all the fuss is about. But arithmetic alone only goes so far. You saw a bit of it in Sanjay's report. Now here's NEWSNIGHT's Beth Nissen.

(BEGIN VIDEOTAPE)

BETH NISSEN, CNN CORRESPONDENT (voice-over): It started in the first months of 1918, maybe in rural Kansas, maybe in China, maybe France, an influenza virus mutated into deadly form. By autumn, it had spread in handshakes, and through the air, through Africas, Europe and the battlefields of World War I infecting eventually one-fifth of the world's population. Millions could not fight the virus or secondary infections like pneumonia and died horrible deaths.

JOHN BERRY, CNN CORRESPONDENT: Some of the terrifying symptoms were that people would bleed not only from their nose or their mouth, but actually from their eyes and from their ears.

NISSEN: John Berry is the author of "The Great Influenza: The Story Of The Deadliest Plague in History.

BERRY: People could die in 24 hours. They literally could wake up feeling OK and be dead by nightfall.

NISSEN: The lethal flu spread most quickly wherever people were concentrated in close quarters: soldier's barracks, troop's ships, city tenements in Europe and the U.S.

BERRY: And almost every city in the country, they ran out of coffins. And in Philadelphia, they actually came to a situation where priests were driving horse-drawn carriages down the street, calling upon people to bring out their dead.

NISSEN: Influenza was no medieval mystery in 1918.

BERRY: People knew it was a contagious disease and the way to avoid getting it was to avoid other people.

NISSEN: But in the U.S. and elsewhere, government officials kept secret how deadly the new flu strain was, fearful the news would hurt the war effort.

BERRY: The Wilson administration only cared about one thing, winning World War I. They told lies to protect morale, in their words. Initially, they were telling everyone this is just ordinary influenza, it's nothing to be afraid of. People who otherwise would have protected themselves, would have stayed home, they were not protected, they were exposed and they died.

NISSEN: Most of the dead were young adults, ages 20 to 40.

BERRY: The best number for the United States is 675,000 deaths. The overwhelming majority died between mid-September and mid-November.

NISSEN: Worldwide, the cost was literally incalculable. BERRY: Probably, at least 40 million people died. There's a Nobel prize winner who thinks at least 50 million and possibly as many as 100 million deaths.

NISSEN: More people in a year than the black death of the middle ages killed in a century. Could it happen again?

BERRY: Another pandemic, unfortunately, is not only possible, it is inevitable.

NISSEN: Inevitable that another influenza virus will someday, somewhere mutate to lethal form, spread among humans.

BERRY: The question is how prepared we are for it. Right now, we are not even close to ready for.

NISSEN: Beth Nissen, CNN, New York.

(END VIDEOTAPE)

COLLINS: Dr. Irwin Redlener is director of the National Center for Disease Preparedness at Columbia University's school of public health right here in New York. Good to have you with us tonight, doctor.

DR. IRWIN REDLENER, CENTER FOR DISEASE PREPAREDNESS: Thanks.

COLLINS: First question, very simple. Are we ready?

REDLENER: No. It's a simple answer, and unfortunately, there's been a lot of planning a lot of talk and anxiety even in government, but we're in the draft stage of a lot of plans that will need to be actually be put into place if we're going to do something useful to prepare for a pandemic flu.

COLLINS: So, what is the time frame here? What are we talking about, exactly?

REDLENER: It's very hard to say. As the set of piece showed, it's just a matter of time before this particular virus changes or what we call mutates. So, it's not just transmissible between birds, but it actually goes between human beings. And once that happens, it can happen this flu season, it could happen next flu season, it could happen five years from now.

COLLINS: Once that happens, it can't be stopped basically?

REDLENER: Well, it can't be stopped. But one thing we would norm normally do with the flu, have vaccine which we have for the more typical flu. For this situation, this is a brand new virus as far as human beings are concerned. So, we don't really have the material to make the proper antibodies to them, we don't have the vaccines in any way, shape or form in a sufficient number.

COLLINS: But what about this company in Switzerland? Apparently they have a vaccine they're working on, it's just a very, very slow process, right?

REDLENER: Well, there's two parts to this. One is, there are a couple of companies that manufacturer vaccine which is extremely slow, actually. And you need a very large quantity of vaccine for bird flu relatively speaking to really get people immunized. Then there's one single company in the whole world based in Switzerland called Rosh (ph), that makes the anti-viral medication that you'd use to treat people if you weren't able to prevent it. And there's a really big backlog at that factory because every country in the world is trying to order the medicine that would treat people if they got the flu. And we're going to be in trouble if they have a pandemic flu this year.

COLLINS: And certainly these countries and these researchers and these very smart scientists are working all together to find these vaccines and pump them out quickly?

REDLENER: They're working hard. And there was a break-through announced a week or so ago that a vaccine process was developed and some would be available. Then we found out that the amount of vaccine that you'd need to actually immunize a person is so high that we'd only, for example, in the supply that the U.S. has ordered, be able to cover a few hundred thousand people. So, we have a big problem of scale here.

COLLINS: So, what needs to be done? Talk to me about Bill Frist and this Manhattan Project. Is this the direction that we need to go in order to really start taking this seriously?

REDLENER: I think so. And this is very reminiscent of what we're doing in terms of bioterrorism preparedness. That it's taken a very long time to get ourselves in gear to do what's necessary to make sure the systems are in place to protect people in case there's either a pandemic flu or a biological attack.

Senator Frist, I think, is very much on the right track. He is calling for a very aggressive, something called a Manhattan Project for the 21st century, that would basically have all hands on deck, let's make the vaccine, let's get enough anti-viral medication. And most of all, we really have to focus on the hospital system, because we won't have enough hospital beds and equipment really to treat people who get very sick in this kind of epidemic.

COLLINS: It's very scary.

REDLENER: It's very scary. It's very scary. And children, of course, and older people are particularly susceptible. Take a city like New York with 8 million people and it would be predicted that about 2.5 million people would get the flu, of which 10 percent might be hospitalized and 2 percent to 3 percent could die from the flu in one flu season.

So we're talking a massive problem of unprecedented scope. And we really need to kind of behave in ways that are responding to the scale of what might be a tremendous disaster for the American public and for the whole world, really. COLLINS: So very, very quickly, what exactly needs to change? I mean, is this something that the president will say, all right, here's the deal and mandate a way for these vaccines to start being produced?

REDLENER: Absolutely. I think there's things that we could do to encourage the vaccine manufacturers and the medication at the pharmaceutical companies to really mass up the number of vaccines and anti-viral medications that are produced over a short period of time. We need to change policies and we to really fix our public health system, so we can actually take care of people if it strikes.

COLLINS: Dr. Irwin Redlener, thank you so much for your time.

REDLENER: You're welcome.

COLLINS: Appreciate it.

And still to come tonight: American warships under fire, but who did the firing? The latest from where the attack took place.

Also: Millions of airline passengers waiting for word on a strike that could shut down a major airline and ruin a lot of summer vacations. Around the country and the world, this is NEWSNIGHT.

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COLLINS: Officials in Jordan now reported as saying al Qaeda was behind a rocket attack on two U.S. warships in a Jordanian port today. The rockets missed their targets, but a Jordanian soldier was killed when one landed in a warehouse nearby. A group with links to al Qaeda has claimed responsibility, but this has not been authenticated. Here CNN's Matthew Chance, now.

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MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): A narrow escape for U.S. warships attacked in a harbor, until now, considered safe. USS Ashland and Kearsarge attached to the Marine Corps, have now left the Red Sea port of Aqaba. It was a rocket attack claimed by a group affiliated with al Qaeda, thousands on board were targeted.

In all, three rockets were fired from a warehouse on the outskirts of Aqaba. The first towards the U.S. ships in port, narrowly missing the bow of the USS Ashland and striking a storage facility, killing one Jordanian soldier and seriously injuring another.

A second rocket landed in the grounds of a hospital in Aqaba, but caused no injuries. The third was fired across the Gulf of Aqaba into Israel. It landed on a taxi driving near the airport in the coastal town of Eilat. It failed to detonate. The driver narrowly escaped.

The attack on the U.S. vessel is the first since the strike on the USS Cole in Yemen in 2000. Then, 17 U.S. servicemen were killed when their "Aegis-"class destroyer was rammed by a small boat, packed with explosives. Analysts say the incident may yet provoke a closer look at U.S. security measures for its ships in overseas ports, even though complete security may prove impossible.

(on camera): Tonight, a big security operation is under way over there in Aqaba. It's believed the warehouse from which the three rockets were fired, was rented just a few days ago by four people believed to be Egyptian and Iraqi nationals.

Jordanian security forces have now sealed off the Aqaba port and are conducting door-to-door searches in a bid to find those responsible.

Matthew Chance, CNN, Eilat, in Southern Israel.

(END VIDEOTAPE)

COLLINS: Up next: Will Northwest Airlines be grounded by a strike?

And later: The candy-coated company that's on the rise. This is NEWSNIGHT on CNN.

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COLLINS: In a moment, find out what you get when you combine a sweet tooth with a sure thing. People like candy, imagine that.

But now it's about a quarter-till the hour. Time for the other headlines from Erica Hill at "HEADLINE NEWS." Hi, Erica.

HILL: Hi, Heidi. People might not like this next story though, a midnight strike looming at Northwest Airlines tonight and talks apparently making little progress, that's according to the union. The airline wants its mechanics, cleaners and custodians to take a 25 percent pay cut.

A state of emergency declared in southern Ontario, Canada after the region was battered by storm that lead to possible tornadoes. Cars were tossed into a ditch, roofs were ripped from homes and barns.

And Space Shuttle Discovery hitched a ride home from the Mojave Desert today on the back of a specially modified Boeing 747. Kind of wacky to look at that picture. The first leg of the journey ended in use Louisiana. They are scheduled to arrive at Cape Canaveral tomorrow. On the way home, Heidi.

COLLINS: Yes. You know, my parents have tickets with Northwest. Maybe they should just hop on like the shuttle like that.

HILL: You know, they might get there faster. You never know. I wish them luck.

COLLINS: Yes. Thank you, Erica.

HILL: Have a good weekend. COLLINS: To most people, the original "Willie Wonka and the Chocolate Factory" was an entertaining way to spend a couple of hours. Well, today, Dylan Lauren, who inherited her business smarts from her father, Ralph Lauren, it was something much, much more than that -- a big-screen, candy-coated business plan, in fact, and that's why she's on the rise.

(BEGIN VIDEOTAPE)

DYLAN LAUREN, DYLAN'S CANDY BAR: Hi, I'm Dylan Lauren, and I am a candy lover. So I decided to take my passion and create the world's largest candy store, and fill it with candy and anything candy- related. That's what Dylan's Candy Bar is, it's (INAUDIBLE) candy.

I was inspired when I was younger by "Charlie and the Chocolate Factory."

And just a bunch of stores that have assorted entertainment philosophy, and I just thought there's not anything like that in the candy business, that you have FAO Schwartz with toys, or Nike has it with sneakers. I thought wouldn't it be fun for me as a candy freak to just walk in and have this like oversized emporium of oversized lollipops.

I have four stores at the moment. I'm hoping to open a good 20 more. The flagship's in New York City. We have Dylan's 25 (ph) are in Houston, Orlando and Roosevelt Field.

Well, this is my office.

I've always loved candy. The first was about the taste. I love gummy bears and gummy fish.

I just always started to look at candy packaging, and as an art history major also was influenced by a lot of pop artists.

This is our stripes, which are on our bags and our logos. I love art and candy.

Did you like the ones that we were talking about for the malls, though? Our theme is to basically merge pop culture art, fashion with candy, and also to have like the largest assortment of colors and flavors.

This is our body shake. It's a milk bubble bath chocolate.

We don't just carry candy, per se, to eat. We have byproducts like chocolate bath powders and vanilla body moisturizers. We're expanding it into our own Dylan's Candy Bar's spa line.

Our customer is really the kid in the adult, and it's anyone. I think the candy store brings out the kid in everyone. And I definitely am, oh, people don't know how old I am. People think I'm 15, because I love candy and I love colors. But I have a mature sensibility about it too, but I think you have to have a sort of an attitude of creativity and fun and anything's possible. (END VIDEOTAPE)

COLLINS: Doesn't get any better than that.

Still to come tonight, the picture of the day, and the father of a country.

A break first, though. This is NEWSNIGHT.

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(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE (voice-over): He'll always be the man astride a tank, facing down a hard-line coup in 1991.

Boris Yeltsin remains a creature of contradiction. A communist who helped destroy communism. A democrat, who opened fire on his own parliament. A man who seemed on the verge of dying so many times, who nowadays looks healthier than ever.

In 1980, Yeltsin was a Communist Party boss in the Ural Mountains city of Sverdlovsk. Ten years later, he was the president of the Russian Republic. The Soviet Union was about to collapse, and when it did, Yeltsin moved into the Kremlin. At the height of his powers, he told CNN...

BORIS YELTSIN, FORMER PRESIDENT OF RUSSIA (through translator): I am not thinking about history at all, and I'm not planning on thinking about it. I'm thinking about deeds.

UNIDENTIFIED FEMALE: But in 1999, in a New Year's address, Boris Yeltsin shocked the world, announcing he was stepping down as Russian president, handing the reins of power to Vladimir Putin. Years of heavy drinking and heart attacks took their toll.

But in retirement, Yeltsin is following a healthier lifestyle, surprising the world once more with his resilience and unpredictability.

(END VIDEOTAPE)

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COLLINS: A lovely picture tonight. This is at Ontario International Airport, a mother who had not seen her kid in seven months, coming back from Iraq.

Thanks for watching us tonight, everybody. I'm Heidi Collins. Have a great weekend.

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