Supreme Court to Hear Vioxx Disclosure Lawsuit Appeal

The U.S. Supreme Court has agreed to hear an appeal by Merck & Co Inc. of a ruling which reinstated a securities fraud lawsuit alleging the company failed to disclose to investors information about its recalled pain drug Vioxx.

The nation’s highest court ruled today that it would consider an appeal of a lower court’s ruling to reinstate the investors’ suit, which seeks billions of dollars in damages. A New Jersey federal judge had dismissed the suit after ruling that the suit had violated the statute of limitations, which is a deadline by which the suit must have been filed.

However, the 3^rd U.S. Circuit Court of appeals overruled the New Jersey court ruling and reinstated the suit against Merck. Merck has now appealed that reinstatement to the Supreme Court, which will have the final word on whether the lawsuit can go forward.

Merck investors accuse the drug company of providing misleading information about the risks of Vioxx, which debuted in 1999 but was pulled from the market in 2004 after clinical studies showed it increased the risks of stroke and heart attack.

Vioxx belongs to a class of pain killers called non-steroidal anti-inflammatory drugs (NSAIDs). Bextra and Celebrex are other brands of NSAIDs still on the market.

On the day Vioxx was recalled, shares of Merck fell 27 percent and continued to slide for months, losing a third of their market value. In all, investors lost about $28 billion in the wake of the Vioxx recall, officials said.

The Supreme Court will hear attorneys’ arguments on the suit during the Fall 2009 term, which begins in October.

In 2007, Merck agreed to pay $4.85 billion to settle claims that Vioxx caused heart attacks and strokes in thousands of users. The appeal now being heard by the Supreme Court is not related to that earlier agreement to pay people who were injured by Vioxx.

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