Merck sued by NY State over fallout from Vioxx

The number of lawsuits arising from Vioxx recall is piling up. The New York State pension fund that had invested in Merck stock has filed a securities fraud class action lawsuit in the United States District Court for the District of New Jersey claiming that the fund suffered $171 million in losses on Merck stock after the company withdrew its Vioxx arthritis drug.

While Merck continues to deny it, evidence is slowly emerging that not only did Merck used some unfair practices to get Vioxx approved by FDA, it also continued to hide problems related to Vioxx. (Related article: Vioxx approval may have been a mistake by the FDA) In fact some experts believe that Merck mounted an aggressive campaign to question the validity of data that demonstrated that Vioxx was a problem drug and was killing arthritis patients.

New York State Comptroller Alan G. Hevesi, who is seeking Lead Plaintiff status in the case, said, "The New York State Common Retirement Fund is exactly the kind of sophisticated and knowledgeable financial institution that the Congress, in the 1995 Private Securities Litigation Reform Act, intended to lead such class action suits."

The lawsuit by NY State is a welcome development for individual Vioxx victims since institutions like this have the resources to mount a strong case that can be used as evidence in other cases filed by individuals.

Related article: Shareholder lawsuits filed against Merck after Vioxx recall