Merck Hid Vioxx’s Risks From Louisiana, Official Says - Bloomberg

Merck Hid Vioxx’s Risks From Louisiana, Official Says (Update2)

By Jef Feeley

April 13 (Bloomberg) -- Merck & Co. never informed Louisiana health officials about the heart-attack risks posed by its withdrawn Vioxx painkiller, a former state agency chief testified in court.

Managers of Louisiana’s state-sponsored health plans would have denied coverage for Vioxx prescriptions if they’d known the drug posed a greater heart-attack risk than rival medicines, David Hood, the former head of the Department of Health and Hospitals, said today in the trial of the state’s lawsuit against Merck. Louisiana seeks to recover as much as $20 million as a refund for those prescriptions.

“If we had known the risk outweighed the benefit and the drug posed a threat to health, we would have done everything we could” to bar reimbursements of Vioxx prescriptions, Hood told a federal judge in New Orleans. It’s the first of more than a dozen refund cases filed by states over Vioxx to go to trial.

Merck pulled Vioxx off the market in 2004 after a study showed the drug doubled the risk of heart attacks and strokes. The company won 11 of 16 Vioxx lawsuits at trial before agreeing in 2007 to create a $4.85 billion settlement fund to resolve thousands of injury claims over the drug. State officials allege Merck executives distorted Vioxx’s health risks in medical literature, advertisements and communications with doctors.

Louisiana officials are seeking more than $11 million in damages, plus expenses and attorneys fees, in their rebate suit over Vioxx prescriptions. The total amount sought is about $20 million, Jim Dugan, one of the state’s lawyers, said in an interview before the trial began.

Rebate Suits

Merck said in a March 30 regulatory filing that 13 state attorneys general have sued the company seeking to recover funds paid to cover Vioxx prescriptions. The drugmaker also faces refund suits filed by five counties and New York City over the medicine, according to the filing.

Lawyers for Whitehouse Station, New Jersey-based Merck, the second-largest U.S. drugmaker, contend Louisiana officials knew about Vioxx’s health risks and lacked the power under state law to make the drug ineligible for reimbursement.

Hood, who served as head of the state’s health agency for six years before stepping down in 2004, said he believes he had the power under Louisiana law in effect in 2001 to bar coverage for drugs that turned out to be defective.

“It would have been unpalatable to expose Medicaid recipients to defective drugs,” said Hood, who is now a health- care policy analyst for the Public Affairs Research Council of Louisiana.

State’s Drug Policy

Still, Hood acknowledged Louisiana didn’t have a restrictive drug-reimbursement policy in 2001 and had never banned reimbursements for a single drug. State officials had Vioxx listed on its preferred-drug list at that time, he said.

If Merck had adequately warned Louisiana officials about Vioxx’s heart-attack risks, regulators would have changed their handling of prescriptions written for the medicine, Hood said.

“There was nothing presented to me to indicate it wasn’t a safe drug,” the former state official said.

Under cross-examination, Hood said he knew Vioxx posed a risk that some users could suffer a heart attack while others might develop stomach problems. “I knew there were benefits and risks,” he noted.

Hood said that while state officials had never considered banning reimbursement for a drug, the “possibility of a defective drug changes the entire picture.”

The Louisiana case is State of Louisiana v. Merck, Sharp & Dohme Corp., 05-3700, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporter on this story: Jef Feeley in New Orleans at jfeeley@bloomberg.net.

Last Updated: April 13, 2010 19:31 EDT

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