August 1, 2005
Health plans have been given the go-ahead to sue Merck & Co. to recover billions of dollars they spent on Vioxx, the painkiller recalled after studies found it could cause heart attacks and strokes.
New Jersey Superior Court Judge Carol E. Higbee granted a motion filed by a labor union health plan to allow a nationwide class-action lawsuit to proceed under the state's consumer fraud act. Merck, based in Whitehouse Station, N.J., had opposed the motion.
The welfare fund of an engineers union had sued Merck in early 2003, arguing that its health plan would not have covered Vioxx prescriptions had it not been for Merck's alleged deception about its risks.
Besides the risk to members' health, the insurers say that they spent much more on Vioxx than they would have on the much less expensive alternatives, based on Merck's claim that Vioxx was easier on the stomach than other painkillers. That claim is also alleged to be of minimal validity.
Under New Jersey law, the attorneys for the union health plan will automatically represent all third-parties nationwide, except for government agencies, who may have been harmed by Mercks conduct. Triple damages are provided under the New Jersey Consumer Fraud Act.
Merck has taken the position that the lawsuit is not a proper one for class-action certification since each prescription must be considered separately and because consumer protection laws vary widely from state to state. The company said it plans a vigorous defense.
The federal government is also negotiating with Merck, seeking to settle a similar claim. If those talks fail, the feds are likely to sue Merck as well.
