Contact l Sitemap

home industries issues reasearch weblog press

Home

US: Pension Fund of New York Files Suit Against Merck

by Barry MeierThe New York Times
December 9th, 2004

The main pension fund of New York State filed a federal lawsuit yesterday against Merck & Company, accusing it of misleading shareholders about the safety of its arthritis pain drug Vioxx, which has since been withdrawn.

The suit, brought in United States District Court in Trenton, said that the pension fund lost about $171 million on Sept. 30, when the company, citing increased heart risks in tests of people who had used Vioxx for more than 18 months, withdrew it from the market. On that day, the price of a share of Merck stock plummeted 27 percent, and it has since drifted lower. Merck shares are down almost 40 percent so far this year, though they closed up 35 cents yesterday, at $28.02.


The suit appears to be the first by a pension fund against Merck, which is based in Whitehouse Station, N.J. A company spokeswoman, Joan Wainwright, said that about 15 lawsuits had been filed, contending that Merck misled shareholders. Several hundred personal injury lawsuits have also been filed against Merck by people claiming to have been injured by Vioxx.


The company has denied any wrongdoing.


In a statement issued yesterday, the New York State comptroller, Alan G. Hevesi, who is also the pension fund's trustee, maintained that Merck knew but failed to disclose that growing evidence indicated that Vioxx users were at increased risk of heart attacks, strokes and death.


"Merck must be held legally responsible for its actions," Mr. Hevesi said. "These actions have put lives at risk and cost shareholders billions of dollars." Mr. Hevesi's suit is seeking unspecified damages.


Besides the company, the suit names several individuals, including Merck's chief executive, Raymond V. Gilmartin.


Merck executives have disputed suggestions that they acted improperly and said they moved promptly to withdraw Vioxx after the patients in the clinical trial - where the drug was being tested as a treatment for colon polyps - experienced increased risks of cardiovascular problems.


"Merck extensively studied Vioxx before seeking regulatory approval to market it," the spokeswoman, Ms. Wainwright, said. "We promptly disclosed the clinical data about Vioxx. When questions arose, we took additional steps, including conducting further prospective, controlled studies to gain more clinical information."


She said that Merck had not seen Mr. Hevesi's lawsuit and so would not comment.


In the suit, Mr. Hevesi cited recent newspaper and broadcast reports and medical journal articles that raised questions about Merck's handling of safety issues surrounding Vioxx.


Some people raised safety questions after Vioxx's approval in 1999 by the Food and Drug Administration. In 2000, for instance, a major clinical trial of the drug found that those taking it had a fivefold greater risk of heart attacks compared with patients in the trial who took another pain reliever, naproxen.


Until recently, Merck executives said that those results did not reflect dangers posed by Vioxx but rather the protective effect of naproxen for cardiac health.


A spokesman for Mr. Hevesi, John Chartier, said that at end of September, the New York State pension fund owned about 9.4 million shares of Merck.


In the lawsuit filed yesterday, Mr. Hevesi is asking the court to consolidate all securities-related claims against Merck in connection with Vioxx into a class action and to make him the lead plaintiff. He also filed a separate but related lawsuit yesterday in United States District Court in New Orleans.


The New York State Common Retirement Fund, as the pension fund is formally known, is the second-largest public pension fund in the country, after Calpers.

It has some $120.8 billion in assets and more than 970,000 retirees, beneficiaries and members.

Copyright 2004 The New York Times Company



This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.