Court rejects Vioxx class action

TRENTON, N.J. - In a major legal victory for Merck & Co. in its massive Vioxx litigation, New Jersey's Supreme Court yesterday rejected a potential class-action lawsuit that could have cost the drug maker up to $18 billion.

New Jersey's highest court, reversing two lower-court decisions, ruled a nationwide class was inappropriate. The lawsuit had been brought by a union health plan on behalf of all insurance plans that paid for prescriptions for the withdrawn painkiller - roughly 80 percent of all Vioxx sold.

"We were thrilled with the decision," said Merck lawyer John Beisner.

The plaintiffs' lead lawyer, Chris Seeger, said he will now proceed with individual lawsuits seeking to recoup what insurance plans paid for the widely used arthritis treatment, which Merck pulled from the market three years ago because it doubled the risk of heart attacks and strokes. Vioxx was then Merck's number two, with about $2.5 billion in annual sales.

Had the class action proceeded, it would have been a setback to the company's strategy of fighting each Vioxx suit individually. The Whitehouse Station, N.J., firm faces nearly 27,000 individual lawsuits from people claiming Vioxx caused heart attacks and strokes, but more than 1,170 cases have been dismissed. Of cases that have reached verdicts, Merck has won nine and lost five; a new trial was ordered in one case.

Merck shares closed up $1.07 at $50.47.

Benedict Morelli, a lawyer representing about 1,200 Vioxx plaintiffs, said he didn't see the ruling as a great victory for Merck because individual insurance companies, managed plans, and union health plans can still sue.

Merck has about $810 million left in its Vioxx defense fund.

THE RULING: New Jersey's Supreme Court rejects a potential class-action lawsuit on behalf of health insurance plans that paid for Vioxx, the blockbuster painkiller withdrawn from the market in 2004 because of cardiovascular risks.

THE IMPACT: The ruling, overturning two lower court decisions, gives drug maker Merck & Co. a victory in a case that could have cost it up to $18 billion. But plaintiffs' attorney Chris Seeger said he plans to file individual lawsuits for health plans seeking to recoup what they spent on Vioxx.

WHAT'S NEXT: Merck still faces nearly 27,000 individual lawsuits from people claiming Vioxx caused heart attacks and strokes. After a summer break, a new round of trials, including some with multiple plaintiffs, starts on Sept. 17.