Following Merck’s voluntary market withdrawal of its second biggest money maker, the arthritis painkiller Vioxx (rofecoxib), Merck was faced with mounting lawsuits involving claims of civil liability as well as charges of potential criminal wrongdoing.
Merck was hit with tens-of-thousands of lawsuits by Vioxx (rofecoxib) consumers following the voluntary market withdrawal of the once highly praised COX-2 selective, nonsteroidal anti-inflammatory drug (NSAID) advertised for its easy-on-the-stomach pain relief, especially for those suffering from arthritis. In addition to those seeking civil remedies against the leading drug manufacturer for its alleged false and inconsistent marketing practices of the short-lived drug, there were governmental investigations, charges of criminal wrongdoing and securities claims by the company’s investors alleging shareholder losses.
All lawsuits, governmental payouts and settlements, including the most recent settlement reached in 2016 on a portion of the securities claims, have cost Merck more than $8.5 billion since Vioxx made its exit from the market in September of 2004. Merck is currently still facing individual securities lawsuits more than a decade after pulling its controversial drug.
The United States District Court Eastern District of Louisiana recognized that an estimated 105 million prescriptions for Vioxx were written in the United States between May of 1999 and September of 2004, resulting in approximately 20 million patients having consumed the drug in the U.S. alone. This resulted in thousands of individual suits and numerous class actions being filed against Merck in both state and federal courts throughout the country, all alleging various product liability, tort, fraud and warranty claims.
In October of 2004, it was reported that according to an unreleased study by government regulators, Vioxx may have led to more than 27,000 heart attacks and sudden cardiac deaths prior to the action taken by Merck to eliminate the drug from the market altogether. However, despite its decision to remove Vioxx from the health care market, Merck continues to deny any liability or wrongdoing for claims brought against it.
While denying liability still, Merck surprisingly pleaded guilty to a criminal misdemeanor charge as a part of a settlement with the United States Department of Justice (DOJ) at the end of 2011. Despite all of its losses with Vioxx, Merck scarcely floundered, and 2017 forecasts show Merck’s shares and revenues steadily increasing at promising rates. Erik Gordon, a pharmaceutical analyst and clinical assistant professor at the University of Michigan’s Ross School of Business, described it to the New York Times as “just a cost of doing business.”
Many scientists, medical professionals, academics, Congressional leaders, government officials, FDA officials and Merck executives long-debated whether Merck and the FDA had prior knowledge, or should have had prior knowledge, about the increased cardiovascular risks to patients taking Vioxx.
As early as May 2000, a little over four years prior to the voluntary market withdrawal of Vioxx, Merck’s top executives in research and marketing met to determine whether to develop a study of the possibility and extent of various cardiovascular risks imposed by the arthritis painkiller that quickly became one of the company’s top-sellers. A Vigor study released just two months earlier, for testing having to do with gastrointestinal risks, had hinted at potential red flags as to Vioxx’s heart safety. The FDA was also immediately made aware of the results from that study. But marketers at Merck decided against a study aimed specifically at Vioxx’s effect on the heart, fearful that it might send the wrong message and interfere with Merck’s competitive edge with the rival drug, Celebrex.
Both Merck and the FDA maintained that the greater risk of heart attack and stroke did not become apparent until after the first 18 months of a patient taking the drug. Vioxx was pulled from the shelves following a long-term clinical trial that showed that patients were more likely to experience a heart attack or stroke while taking Vioxx over a longer period of time.
Following the release of the Vigor study results, in 2001, Dr. Eric J. Topol along with cardiologists at Cleveland Clinic, published a report in the Journal of the American Medical Association (JAMA) alleging that Cox-2 inhibitors such as Vioxx appeared to increase the risk of cardiovascular events. Merck simply responded that the report was flawed and denied the need to conduct a trial directed specifically at any such risks. Topol reported that prior to the report’s publication, scientists from the billion-dollar drug company requested that the information be kept from the public. Merck officials denied that claim.
The FDA was required to answer to government officials at a Congressional hearing, following Vioxx’s withdrawal from the market, as to its seemingly lax handling of Merck’s pain relief drug. In 2005, the FDA imposed new, more stringent labeling requirements on all manufacturers marketing NSAIDs, including COX-2 selective, NSAIDs, such as Vioxx’s number one competitor, Celebrex, which remained on the market.
Merck is said to have been relying heavily upon Vioxx’s success (thereby minimizing its potential risks), needing it to take off prior to the termination of patents on four of its other drugs allowing for generic substitutes to take over and revenues to potentially diminish.
It didn’t take long following Merck’s decision to pull Vioxx from the market for the lawsuits to begin flowing in from across the nation, with patients and their loved ones seeking retribution for injuries and/or death that they claimed was the direct cause of taking Vioxx. Some estimates suggested roughly 38,000 people suffered heart attacks or strokes while taking Vioxx. A total of about 160,000 patients were believed to have been injured by the drug. While it was found that some of the patients already had prior and ongoing heart conditions, many did not.
One of the first cases to be tried was in Texas, resulting in a jury verdict in favor of the injured Plaintiff awarding the victim’s surviving spouse $253 million in compensatory and punitive damages. That award was subsequently reduced under Texas tort laws that impose caps on damages, and later overturned altogether by a court of appeals that found that there was insufficient evidence to determine if the heart attack suffered by the deceased patient was directly caused by his use of Vioxx. This was the first of several wins for Merck, which went on to successfully argue at least 10 more individual Vioxx lawsuits. Many proceeded on to appeals, including the Texas lawsuit, which was upheld by the Supreme Court.
As time pressed on, a total of approximately 60,000 personal injury cases were filed against the drug manufacturer for Vioxx injuries. On February 16, 2005, the Judicial Panel on Multidistrict Litigation (JPML) conferred multidistrict litigation (MDL) status on Vioxx lawsuits filed in various federal courts throughout the country. Despite the multiple individual wins, Merck eventually settled the cases, without admitting fault, in 2013, with a payout fund of $4.85 billion.
To be eligible, patients had to show they took the drug for a month (30 pills), even though it took 18 months for increased cardiovascular problems to appear.
Merck agreed to pay another $950 million to the DOJ in 2011 in an effort to resolve criminal charges and civil claims related to its alleged illegal promotion and marketing of Vioxx. Under the terms of the conditions of the settlement, Merck also agreed to plead guilty to a misdemeanor charge of a single violation of the Food Drug and Cosmetic Act (FDCA) for introducing a misbranded drug into interstate commerce. In accepting a guilty plea as to a misdemeanor for illegal promotional activity, Merck was ordered to pay a criminal fine of $321,636,000.
A secondary civil settlement required an additional payout from Merck of $628,364,000 to resolve allegations regarding off-label marketing of Vioxx and false statements about the drug’s cardiovascular safety. The payout was to be divided between the United States and participating Medicaid states, based on claims that Merck’s illegal marketing practices influenced doctors to prescribe a drug they would not have otherwise prescribed.
The misbranding charge resulted from Merck promoting Vioxx as a drug for treating rheumatoid arthritis prior to that use being approved by the FDA.
Over a decade after Vioxx went south and Merck withdrew it from the market, Merck agreed to pay yet another $830 million to settle an MDL spurred by Merck’s disgruntled investors. The company’s shareholders claimed that Merck’s misleading statements regarding the arthritis painkiller and its minimizing the risks influenced them to make a bad investment, thereby causing them to incur significant losses following the unforeseen voluntary market withdrawal of the drug in 2004.
Vioxx continues to haunt the giant drug manufacturer as Merck will still have to battle out a few remaining individual securities lawsuits from investors who previously opted out of the class-action lawsuit certified by the judge in 2013.
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