Shareholders who saw billions wiped off the value of the drugmaker Merck when it withdrew its painkiller Vioxx in 2004 have been given new hope of compensation, following an appeal court ruling in New Jersey.
A three-judge panel ruled that a group of shareholder lawsuits should be sent back to the federal court which dismissed them last year, reviving a significant legal headache for Merck.
The company already faces more than 28,000 lawsuits from patients who say Vioxx caused them or their loved ones to suffer a heart attack, and that Merck managers covered up the risks for years before finally taking the pill off the market. In September 2004, it bowed to evidence from a large-scale clinical study which showed that Vioxx significantly increased the risks of heart attacks and strokes.
The plaintiffs in the shareholder suits say that, if managers had heeded earlier warning signs, they would not have opened the company up to expensive litigation and the share price may not have collapsed. The withdrawal of Vioxx eliminated $2.5bn in annual sales.
Plaintiffs' attorney Darren Robbins praised the appeal court ruling. "The decision is a tremendous victory for Merck shareholders who were victimised by company insiders in connection with the Vioxx debacle," he said. "We look forward to returning to the district court to prosecute the cover-up of one of the most egregious drug scandals in recent memory."
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1 comment:
For an article looking a little "under the hood" at the Vioxx tragedy, see: "The Devil’s in the Details: A Closer Look at Merck’s Vioxx Trials" which can be found at:
http://blog.aesisgroup.com/2006/08/07/the-devils-in-the-details-a-closer-look-at-mercks-vioxx-trials.aspx
It explains some of the potential rationale behind Merck's defense of these numerous suits. Specifically relating to the difference between short-term and long-term use.
For more general articles on the developing importance of drug safety and its implications for FDA reform, see:
http://blog.aesisgroup.com/2006/05/01/drug-safety-debate-to-yield-big-changes-grow-more-controversial.aspx
and
http://blog.aesisgroup.com/categories/FDA%20Reform.aspx
I'm not a lawyer, not a judge and not involved in the case and hence not seeking to apportion blame. Of course, I do hope that this (and other such) tragedies need to be prevented and to the extent there may be "systemic" problems, these should be addressed.
Ogan Gurel, MD
gurel@aesisgroup.com
http://blog.aesisgroup.com/
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