Federal judge rules for Merck in first state suit seeking reimbursement for covering Vioxx

Federal judge rules for Merck in state Vioxx suit

TRENTON, N.J. — Drugmaker Merck & Co. on Tuesday won the first trial over withdrawn painkiller Vioxx brought by a state trying to recoup what it paid for residents to take the drug, arguing it wouldn’t have been covered had its risks been better known.

U.S. District Court Judge Eldon Fallon in New Orleans ruled for Whitehouse Station, N.J.-based Merck in a 2005 case brought by the Louisiana Attorney General’s Office, one of more than a dozen such government lawsuits.

Attorney James R. Dugan II of the Murray Law Firm in New Orleans, the lead attorney representing Louisiana, said his team would be meeting with state officials later this week to discuss appellate possibilities.

“We are not giving up on the case,” Dugan said, adding he believes the state has strong grounds for an appeal.

Dugan’s team had argued Louisiana would have restricted sales of Vioxx, a former blockbuster drug with peak annual sales of about $2.5 billion, through the state’s Medicaid program if officials had known more about the drug’s risks of heart attack and stroke.

Lawyers for the state also had argued that Merck exaggerated how safe Vioxx was, compared with other anti-inflammatory drugs, in reducing the chances of potentially fatal stomach ulcers and gastrointestinal bleeding.

In his ruling, Judge Fallon noted that even though pain relievers in the same class as Vioxx, called Cox-2 inhibitors, were all required by the Food and Drug Administration to carry a warning about cardiovascular risks, Louisiana health officials never restricted payments for those drugs. The judge also ruled that “the weight of the evidence indicates that Vioxx has gastrointestinal benefits” and that Merck’s marketing was consistent with that evidence.

Louisiana was trying to recover more than $20 million, for what it paid for Vioxx prescriptions, interest, attorney fees and litigation expenses, Dugan said.

Tuesday’s ruling followed a nonjury trial presided over by Fallon, who heard testimony and reviewed other evidence from April 12 through April 21.

In the only other such case in which a court has ruled, a case filed by the Texas attorney general, Merck won a summary judgment from a state judge, said Tarek Ismail, outside counsel for Merck.

“We’re very pleased with the court’s decision and believe it accurately found that Merck provided the correct information about Vioxx … and that the state would not have acted differently,” Ismail said.

The company still faces about 20 similar lawsuits filed by other government entities, including 13 filed by state attorneys general, one filed by the city of New York and five filed by counties in New York State, a Merck spokeswoman said.

Merck voluntarily pulled Vioxx from the market on Sept. 30, 2004, after its own research found the popular treatment for arthritis and other pain doubled risk of heart attack, stroke and death. Shareholders lost a combined $28 billion when Merck stock plunged overnight after Vioxx was withdrawn.

Merck was quickly slammed by lawsuits from patients alleging harm, stockholders who lost money and groups that had paid for Vioxx prescriptions. The company is winding down payments out of a $4.85 billion settlement reached in November 2007 to end roughly 50,000 patient lawsuits, the vast majority of such cases.

Merck won about two-thirds of the Vioxx personal injury lawsuits that went to trial.

Merck shares fell 51 cents, or 1.4 percent, to $35.43 Tuesday, a day when the broader markets were all down sharply.