Healthy Skepticism Library item: 11025

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Court Sends Vioxx Suits Back to Judge
Associated Press 2007 Jul 18
http://biz.yahoo.com/ap/070718/merck_vioxx.html?.v=2

Full text:

AP
3rd Circuit Panel Sends Vioxx Suits Back to N.J. Federal Judge

PHILADELPHIA (AP) — A federal appeals court revived a group of shareholder lawsuits that accused Merck & Co. officers and directors of violating their duties by concealing the health risks of the company’s Vioxx painkiller.

The three-judge panel of the 3rd U.S. Circuit Court of Appeals ruled Wednesday that the lawsuits should be sent back to the New Jersey federal judge who dismissed them in May 2006.

Vioxx, once a $2.5 billion-a-year blockbuster arthritis drug, was taken off the market in 2004 after a study found that users had a higher risk of heart attack, stroke and death than patients taking dummy pills.

The appeals court concluded that U.S. District Judge Stanley R. Chesler erred in not allowing the plaintiffs to amend their complaint with additional materials. Chesler had ruled on the grounds that those materials were acquired as a result of a consensual discovery agreement.

The panel said the district judge needs to determine whether the additional materials would affect the lawsuit’s merit.

Since it is a shareholder suit, the plaintiffs normally would have been required to first make a demand upon the company’s board of directors. But the plaintiffs said such a demand would have been futile at the time they began the lawsuit.

“Of course, we express no opinion about whether the newly acquired facts that are included in the amended complaint will alter this analysis,” the 3rd Circuit judges wrote. “The allegations must not simply demonstrate an aloof or negligent board, but nonfeasance that rose to the level of egregiousness or bad faith.”

“We look forward to presenting our arguments anew to the district court under the guidance provided by the appellate court today,” said Ted Mayer, an attorney for Merck. “Given that today’s ruling did not challenge the reasoning of the lower court in previously dismissing the lawsuit, we believe that the outcome should be the same.”

Plaintiffs’ attorney Darren Robbins praised the ruling.

“Today’s decision is a tremendous victory for Merck shareholders who were victimized by company insiders in connection with the Vioxx debacle,” Robbins 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.”