I was forwarded this story from my friend Joanne Bloom at RBS Re.

So can Merck have it both ways? For years, the drugmaker has argued there was no evidence to suggest that Vioxx was causing heart attacks and strokes before its September 2004 withdrawal. As recently as last month, Merck dismissed a new analysis in the Archives of Internal Medicine purporting to show links between the painkiller and cardiovascular disease could have been detected going back to 2000.

Now, though, Merck lawyers are arguing before the US Supreme Court that, based on publicly available information, shareholders could have detected possible securities fraud back in September 2001. Shareholders, however, filed lawsuits in November 2003 alleging the drugmaker misled them by downplaying clinical-trial data suggesting Vioxx caused increased cardiovascular risks.

The time difference is crucial. At issue is when investors should have known there was possible securities fraud and Merck lawyers argue the two-year statute of limitations expired by the time lawsuits were filed, so shareholders are out of luck. As an example, they cited an FDA warning letter sent in September 2001 alleging Merck misrepresented Vioxx by minimizing the potential to increase heart attack risks.

One can argue that proving securities fraud may not be precisely the same thing as proving that Merck knew and failed to disclose there was a serious problem with its drug, and that patients were harmed. In any event, there does seem to be a degree of irony involved as Merck continues to tell patients there was no reason to suggest any problem in 2001 when, in fact, shareholders should have known a problem existed.

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This entry was posted by Adam V. Russo on Thursday, December 3rd, 2009 at 9:21 am and is filed under ERISA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.