City and state cops, firefighters and teachers lost a combined $287 million from their retirement funds after Merck recalled its Vioxx painkiller.
Now, state Controller Alan Hevesi wants some of that money back.
Hevesi sued Merck and sought lead plaintiff status in a class-action lawsuit for the state’s retirement fund, which lost $171 million after Merck’s stock plunged following the recall of Vioxx.
The retirement funds managed by city controller William Thompson also declined an estimated $116 million in value after Merck’s share dipped amid evidence Vioxx increased the risk of heart attack and stroke.
“Merck has produced a product that they knew was harmful and dangerous for a substantial period of time,” Hevesi told the Daily News. “That’s damaging to people’s health and lives and it ultimately cost shareholders billions of dollars.”
After the recall of Vioxx, which some 80 million people were taking and produced $2.5 billion in sales last year, Merck’s stock has plunged 38%. It’s now at $28.02.
The House Energy and Commerce Committee has opened a probe into the safety monitoring of Vioxx.
In recent Senate testimony, two scientists said they were pressured to back off criticism of Vioxx after warning it might cause heart attacks and strokes.
Hevesi said there could be a battle to take the lead plaintiff spot in the case against Merck.
“We’ll go to Louisiana and file,” he said. “There’ll be resistance by lawsuits filed a long time ago. We have legal reasons why we should take the lead.”
Even if he becomes the lead plaintiff, Hevesi cautioned the case will require patience. A $2.6 billion Citigroup settlement earlier this year took about two years to negotiate.
The Merck suit is a “process that’ll take a number of years,” said Hevesi. “Investors will only get back a percentage of the losses.”