WASHINGTON — The US Supreme Court said investors who lost huge amounts betting on the blockbuster drug Vioxx can sue Merck & Co. over whether the pharmaceutical giant provided enough information about the painkiller’s risks before it was pulled from the market.
The high court agreed with a federal appeals court’s decision to allow a class-action securities lawsuit. The suit was over whether the drug maker provided adequate information about the drug’s risks before its withdrawal.
The company pulled the drug on Sept. 30, 2004, because it doubled the risks of heart attack, stroke, and death. Investors lost tens of billions of dollars in shareholder value overnight.
The class-action suit will now move forward in federal court.
“Merck is disappointed in today’s decision, but believes that the allegations in the complaint are unfounded and will continue to defend itself vigorously,’’ said Bruce Kuhlik, the drug maker’s executive vice president and general counsel.
Investors have two years to sue a company accused of defrauding investors. Merck argued that the two-year clock began when the first hint of Vioxx trouble was made public in September 2001. Investors argued that the two-year time limit should not have been started in 2001.
Justice Stephen Breyer, writing a unanimous judgment for the court, agreed with the investors. “The plaintiff’s suit is timely,’’ he said.
After it pulled Vioxx from the market, Merck was sued by shareholders, patients, and survivors claiming Vioxx caused heart attacks and strokes, and from insurance plans seeking reimbursement for their costs for covering Vioxx prescriptions.
Merck says the investors should have known from public information that there could be problems with the drug because the Food and Drug Administration had issued warnings to Merck about Vioxx risks late in September 2001.