Merck sued by State of Oregon over Vioxx

Merck, the maker of now-recalled drug Vioxx, is being sued left and right by Americans. As many as 60,000 may be dead in the US alone. After the Texas judgment, there has been a surge in number of lawsuits, particularly from victims overseas.

But individuals are not the only ones suing. Apart from many investigations underway by several government agencies, states are also suing the company for committing all kinds of fraud. For instance, while Vioxx victims in the state of Oregon are still not allowed to sue Merck, the State itself is not banned from asking for damages. Oregon State Treasurer Randall Edwards has filed two securities fraud lawsuits on behalf of the Oregon Public Employee Retirement Fund ("OPERF"). The suit seeks damages in excess of $15 million for violation of the Oregon Securities Law.

The complaint alleges that Merck and the individual defendants knew but failed to disclose that Vioxx caused a statistically significant risk of cardiovascular events, including heart attacks, strokes, and death. The State asserts that Merck knew of the medical risk even before the Food and Drug Administration approved Vioxx for use as a prescription drug in 1999.

Later studies performed by Merck and by others reinforced Merck’s knowledge. Yet Merck failed to disclose, and knowingly concealed, the risks created by Vioxx until September 2004 when it announced it would withdraw Vioxx from the market in response to what it claimed was "new evidence."

In reaction to Merck’s announcement, the stock price collapsed and has continued at a low level. The price fell further a month later, when the truth about Merck’s earlier failure to disclose the risks of Vioxx was publicly revealed. The lawsuit alleges that OPERF was harmed by Merck’s and the individual defendants’ failure to disclose important information about Vioxx because OPERF purchased over a million shares of Merck stock at inflated prices, before the truth was revealed.

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