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STATE OF TEXAS SUES MERCK FOR VIOXX-RELATED FRAUD

Jul 1, 2005 | www.Newsinferno.com The tens of thousands of individual personal injury and wrongful death lawsuits arising out of the Vioxx debacle are not the only legal actions Merck & Co. is facing, or will face, with as time passes. Class actions for money damages and medical monitoring and treatment are also pending or soon to be commenced.

In addition to the personal injury type cases, however, are the potential lawsuits from disgruntled Merck shareholders who lost billions of dollars when the value of their stock plummeted after Vioxx was pulled from the market. Most are convinced the losses could have been avoided or greatly diminished had Merck’s management handled the entire matter in a more straightforward and honest way.

There are investigations by Congress and the FDA concerning Merck’s alleged withholding of data and documentation which indicated the cardiovascular risks of Vioxx and COX-2 inhibitors in general were far greater than Merck would have had the public, the FDA, and lawmakers believe.

The imposition of criminal sanctions is also something being looked into by the appropriate federal law enforcement agencies and officials.

Last, but certainly not least, are the very unhappy state governments which believe Merck defrauded them out of hundreds of millions of dollars in Medicaid payments by misrepresenting the safety of Vioxx for several years.
The Wall Street Journal is now reporting Texas has become the first state to file such a lawsuit. In addition to $168 million in damages, the state is seeking additional civil penalties. Texas Attorney General, Greg Abbot, believes the state can prove total damages in excess of $250 million including treble (triple) reimbursement of $56 million (or $168 million) for five years of filled Vioxx prescriptions.

It is estimated that 700,000 Vioxx prescriptions were filled through Medicaid during those five years in Texas alone. Abbot sees these prescriptions as part of a willful misrepresentation on Merck’s part as to the safety of the drug. To him, the entire affair represents nothing more than “a prime example of a company’s drive for profit steamrolling its duty to be safe.”

Merck position, at least publicly, is that it acted responsibly at all times in its marketing of Vioxx.

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