Painkiller Maker Pays Massive Class Action Settlement in False Claims Case

321516A drug that may be a distant memory for users made headlines recently when a case against the manufacturer settled for more than $800 million recently. Although it hasn’t been on the market since 2004, the painkiller Vioxx is still making headlines and costing its maker millions of dollars.

The company pulled the pills from the market when it was determined it could increase stroke and heart attack risks in patients. The drug company agreed to resolve a class action lawsuit by paying $830 million to shareholders recently. The shareholders argued the drug maker made misleading statements about its safety while it was still being prescribed.

The drug was introduced in 1999. The lawsuits began in 2003. They were consolidated in a case under a New Jersey federal judge and the group was certified as a class – meaning it can proceed as one action on behalf of many different parties – in 2013.

Shareholders alleged the drug company knew of the safety risks before the drug reached the market, then tried to minimize risks as problems began to publicly emerge while the drug was still being prescribed. The drug company denied allegations in court documents. Part of the case went to the U.S. Supreme Court, where it was unanimously ruled that investors hadn’t waited too long to bring their cases.

The company also faced a list of product liability class action lawsuits alleging that patients suffered heart attacks or strokes due to the drugs, and that the company failed to warn them properly of the risks. Merck admitted no liability as part of the settlement.
The company also agreed to pay $950 million to resolve accusations by the U.S. Department of Justice and state governments alleging the company lied to governments about the drug safety, and marketed it for uses not covered by the approval of the Food and Drug Administration. Merck pleaded guilty to a misdemeanor for violating federal drug laws by promoting Vioxx for use in the treatment of rheumatoid arthritis before the FDA approved it to do so.