Subject:  New York Comptroller Sues Merck |
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Damaged_kidneys
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Date Posted: 01:40:55 12/01/04 Wed
New York Comptroller Sues Merck
State's Pension Fund Has Lost $171 Million Since Drugmaker Pulled Vioxx
By Brooke A. Masters
Washington Post Staff Writer
Wednesday, December 1, 2004; Page E03
NEW YORK, Nov. 30 -- New York Comptroller Alan G. Hevesi sued Merck & Co. on Tuesday, seeking to recoup value lost in the state's pension fund after the drug manufacturer pulled its top painkiller Vioxx off the market in September.
Hevesi asked a federal judge to approve a shareholder class-action lawsuit that alleges the Whitehouse Station, N.J., company misled investors about Vioxx's safety and future sales prospects and to make the pension fund the lead plaintiff.
The New York fund has lost $171 million in value since Merck pulled the arthritis drug because of a study that linked its long-term use to increased risk of heart attacks and strokes, Hevesi said. The magnitude of the loss underscores the fact that Merck, previously considered a stable and reliable investment, was widely held by pension funds and mutual funds.
Merck stock has fallen about 38 percent since the Vioxx withdrawal, but it closed Tuesday at $28.02, up 35 cents, or 1.26 percent.
"Merck must be held legally responsible for its actions. Those actions have put lives at risk and cost shareholders billions of dollars," Hevesi said in an e-mailed statement.
Merck spokesman Tony Plohoros said the company had not seen the lawsuit and could not comment specifically on it. But he said Merck officials continue to believe they handled Vioxx appropriately.
"We promptly disclosed the clinical data," he said. "When questions arose, we took additional steps, including conducting further prospective, controlled studies to gain more clinical information about the medicine. When information from these additional trials became available, we acted promptly and made the decision to voluntarily withdraw Vioxx."
Merck has said the Securities and Exchange Commission and the Justice Department are investigating the company's handling of the drug.
At least half a dozen other would-be securities class-action lawsuits have been filed against Merck, which is also facing hundreds of product liability lawsuits from patients who blame it for specific health problems.
Under federal law, when multiple shareholder lawsuits are filed against a company around the country, they are generally consolidated into a single case, and the investor with the largest losses is usually designated the lead plaintiff. The size of the New York pension fund's losses make it a likely candidate for lead plaintiff status.
http://www.washingtonpost.com/wp-dyn/articles/A23649-2004Nov30.html
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