Merck Lawsuit Settled for $830 Million

by | Feb 4, 2016 | Big Pharma Lawsuits | 0 comments

New Jersey-based pharmaceutical company Merck recently settled a federal class action lawsuit for $830 million. The Merck lawsuit had been brought to federal court by investors who had purchased company stock between May 21, 1999, and October 29, 2004. Former stockholders alleged that Merck knew about negative results from trials of its arthritis drug Vioxx, but hid the data from investors.

Vioxx Rises, Then Falls

Merck developed Vioxx (rofecoxib) as a treatment for acute pain from conditions like osteoarthritis. The drug was approved by the FDA on May 20, 1999, and doctors prescribed the painkiller to millions of patients. However, in 2004, after racking up more than $11 billion in global sales, Merck voluntarily withdrew Vioxx from the market for its suspected relation to 140,000 heart attacks in patients who took the drug.

Ongoing Legal Woes for Merck

The Merck lawsuit is not the first one related to Vioxx, nor will it be the last. In 2008, Merck settled a class action lawsuit brought by users of the anti-inflammatory drug, claiming it had caused health complications. Merck agreed to pay out $4.85 million to settle out of court. Next came a $950 million payout in 2011 when Merck pleaded guilty to violating marketing laws by hiding safety information from the US Justice Department.

Most of the Settlement to Be Paid In Cash

Although part of the investor settlement will be covered by insurance claims, Merck will need to issue about $630 million in cash to the plaintiffs, plus legal fees. A statement from Merck said that the settlement is not an admission of any wrongdoing.

Merck’s Other Healthcare Products

Merck, founded in 1917, also makes Gardasil (HPV vaccine), Singulair (asthma and allergy treatment), and Propecia (hair loss treatment), as well as many other “vaccines, medications, and consumer and animal health products,” according to the company’s website. In 2007, Merck reacted to controversy around Gardasil by voluntarily stopping its state-level lobbying efforts. Amid accusations that the drug would encourage promiscuity, a Merck doctor defending the company’s intentions, stated at the time, “Our goal is to prevent cervical cancer. Our goal is to reach as many females as possible.”

Additional Merck lawsuits are still pending.