Merck Vioxx Shareholder Lawsuit Readers of this blog are, by now, aware of the many issues surrounding Merck’s blockbuster nonsteroidal, anti-inflammatory medication Vioxx (rofecoxib) and negative cardiac events. The cardiac problems associated with Vioxx, and its subsequent withdrawal from the market, spawned scores of lawsuits. These include Merck shareholder lawsuits, which were recently the subject of oral arguments before the U.S. Supreme Court
Vioxx was approved for use in 1999, and quickly became a bestseller for Merck, with annual sales of $2.5 billion; however, the painkiller was pulled off the market in 2004 after an analysis of patients using Vioxx linked the defective drug to more than 27,000 heart attacks or sudden cardiac deaths in the U.S. from 1999 through 2003. The withdrawal prompted thousands of product liability lawsuits that claimed Merck didn’t properly warn doctors and patients of the drug’s risks.
A New Jersey lawsuit Merck appealed
To settle most of those suits, Merck established a $4.85 billion fund in November 2007. A New Jersey lawsuit Merck appealed—McDarby v. Merck—was one of a few not included in the settlement, Business Week said, previously. The New Jersey Supreme Court recently threw out the Merck & Co. appeal of a $4.5 million Vioxx award, which according to a Business Week report, ended the last unresolved Vioxx patient lawsuit.
Now, attorneys for the pharmaceutical giant have tried to convince the U.S. Supreme Court that Merck investors delayed and did not conduct the investigations needed to sue Merck for allegedly not correctly warning about Vioxx’s risks, said the Associated Press (AP). The court’s ruling will aid in illustrating legalities when determining when time frames initiate related to the two-year deadline for suing a company accused of defrauding investors, the AP explained.
Merck is hoping the Supreme Court will overturn a 3rd U.S. Circuit Court of Appeals decision to allow a class-action securities lawsuit connected to what the AP described as “tens of billions of dollars in shareholder value” that plummeted when Vioxx was withdrawn from the market. Investors are accusing Merck of omission of critical information and releasing misleading information on Vioxx’s risks, said the AP.
Merck now says its investors should have been aware, based on information in the public domain, that problems could have existing with Vioxx, citing a U.S. Food and Drug Administration (FDA) warning issued to the drug maker in late 2001 regarding Vioxx, said the AP.
Merck is also relying on a study that compared Vioxx to the pain relieve
Merck is also relying on a study that compared Vioxx to the pain reliever, naproxen, in which Vioxx was found to result in a five-fold increased risk for heart attacks, said the AP. Officials at Merck continually argued against the findings saying that the results had to do with naproxen’s heart-protecting abilities; experts have “dismissed” that claim said the AP. “It would be the height of irony that for Merck’s success in concealing its fraud through the scientific uncertainty that was occurring with the naproxen hypothesis, that it would have this suit thrown out on statute of limitations grounds and never face the day in court that the investors here expect and deserve,” said investor lawyer David C. Frederick, quoted the AP.
A U.S. district judge who ruled that the lawsuit was filed after expiration of the two-year statute dismissed the November 2003 lawsuit; however, the Philadelphia court of appeals disagreed and reversed the ruling, said the AP. That ruling enabled the shareholder lawsuits—which have been consolidated in federal court—to continue, said the AP, which explained that the court said investors could have no reasonable way of knowing two years in advance that the there could have been potential wrongdoings on Merck’s part. According to that ruling, the statute was deemed to have begun following discovery of the wrongdoing. A decision is expected in the case– Merck v. Reynolds, 08-905—next year, said the AP.