New York Sues Merck Over False Advertising Claims

Sep 26, 2007

The State of New York, represented by New York City Mayor Michael Bloomberg and Attorney General Andrew Cuomo, filed a lawsuit last week claiming Merck misrepresented the risks associated with Vioxx in its ad campaign for the anti-inflammatory drug.

The suit seeks restitution for money spent on the drug by state-funded third-party payers. "Merck's irresponsible and duplicitous conduct endangered the health of New Yorkers and wasted our tax dollars," Cuomo stated in a release. According to Cuomo, Medicaid and Elderly Pharmaceutical Insurance Coverage (EPIC) spent more than $100 million on Vioxx prescriptions in New York State between 1999, when Vioxx was introduced, and 2004, when it was pulled from the market. New York City paid a substantial share of those costs for its residents receiving Medicaid assistance.

According to a statement by Merck, "The fact is that Vioxx worked for patients because it was effective at relieving pain with fewer gastrointestinal effects than other medicines in its class. Additionally, heart attacks and the injuries alleged in the suit were common before Vioxx was ever on the market, and they remain common today."

Peter Biersteker, partner at Jones Day, told Pharm Exec on Tuesday that New York is facing an uphill battle due to the number of legal defenses available to Merck in these kinds of lawsuits.

"There have been a number of cases that say that third-party payers, like Medicaid, cannot sue on behalf of the individual insurers and that their claims are too remote," Biersteker said. "I see the allegation that Merck understated the health risks of Vioxx, specifically cardiovascular risk. But let's say the warning was stronger, are they saying that nobody would have bought it? That just doesn't make much sense."

New York is hedging its bets with a newly inked New York False Claims Act. In this case, the act allows the state to seek compensation for the money that was paid to insurance companies as a result of Merck's alleged false advertising.

To Biersteker, the fundamental problem with suits like New York's is double recovery. "For those people who do suffer from a cardiovascular event because they took Vioxx, they are entitled to get personal injury damages if they prevail," he said. "For the most part, courts, when confronted with these types of lawsuits say, ?No, the people who get harmed are those who need to recover money.'"