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Texas proving to be a Very Troublesome Venue for Merck (and Vioxx) as Action by the State’s Attorney General Proceeds

Aug 21, 2005 | As Merck & Co. was in the process of losing the first of some 4,000 Vioxx-related civil negligence and wrongful death cases pending against it, the company was faring no better in its battle with the Texas Attorney General, who is no fan of the pharmaceutical giant.

While Thursday’s $253 million verdict was bad enough, the potential for even more serious consequences being imposed on Merck in the state of Texas is looming.

Texas is also the first state to bring a lawsuit charging Merck defrauded it out of hundreds of millions of dollars in Medicaid payments by misrepresenting the safety of Vioxx for several years.

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. That position suffered a serious setback as a result of the jury verdict against the company this week.

In the action by the state of Texas, Merck has made a motion to remove the case from state to federal court. Attorney General Abbott has sharply criticized Merck for attempting an end-run around the state's lawsuit accusing it of misrepresenting the safety of Vioxx.

“Merck may try to run from the Texas courts, but they will not be able to hide from their scheme to misrepresent the safety of Vioxx to Texans,” said Abbott. “The company is clearly trying to evade justice by using these delay tactics.”

“This is a major disappointment to the taxpayers of Texas, who deserve to be reimbursed for the company’s wrongful scheme to defraud Medicaid. I urge Merck to stop evading their obligations. A Texas jury deserves to hear evidence of fraud in a Texas district court.”

Abbott has filed a request that the case be remanded to state court telling U.S. District Judge Lee Yeakel that no federal issue exists to warrant a change of venue.

It seems unlikely, however, that a federal judge is going to embroil himself in the Vioxx debacle simply to satisfy Merck’s desire to “get out of town” so it does not have to deal with another potentially unsympathetic Texas jury.

Frontier justice can be rough, just ask Merck.

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