BENEATH THE MURKY
MERCK
Sightings from The Catbird Seat
~ o ~
March 31, 2008
Merck, Schering-Plough
Sink on Vytorin
By Damian Troise, AP Business Writer
Merck and Schering-Plough Skid As Analysts Expect Trial Results to Hurt Cholesterol Drug Sales
NEW YORK (AP) -- Shares of Merck & Co. and Schering-Plough Corp. fell to record lows Monday, as analysts warned new clinical data would cause sales of their blockbuster cholesterol drug Vytorin to fall further.
The companies market Vytorin through a joint venture, but earlier this year, partial results from a clinical study showed that it was no more effective at limiting plaque buildup than Merck's Zocor, a drug that is already available in generic form. Full results of that study were released Sunday.
Vytorin is a combination of Zocor and Schering-Plough's drug Zetia.
Schering-Plough shares plunged as low as $14, touching their lowest levels since August 1996. Merck shares fell as low as $36.82, their lowest since June 2006.
Leading physicians are now recommending the use of older drugs called statins before putting patients on Vytorin. Many physicians had prescribed Vytorin in lieu of higher doses of statins because of what some said was an undue fear of side effects.
"There was an irrationality to begin with," said Dr. John LaRosa, president of State University of New York Downstate Medical Center.
One ultimate result of the outcome could be a tightening of regulatory standards at the FDA when it comes to approving cholesterol drugs, LaRosa said.
Federal and New York State officials have been investigating why results of the study were not released for nearly two years after the study ended. The company has also been chided for its aggressive marketing of the drug in that interim period.
According to TNS Media Intelligence, which tracks advertising spending, the company spent about $472.8 million on advertising since the drug hit the market.
Wall Street, meanwhile, expects prescriptions of Vytorin to decline further in the wake of a recommendation to use the drug only after initial therapy with older drugs like Pfizer Inc.'s Lipitor and AstraZeneca PLC's Crestor....
Lehman Brothers analyst Charles Butler downgraded Schering-Plough shares on the news, and cut his price target on the stock by more than 40 percent...
Besides the Vytorin news, Merck also halted enrollment in a study for the cholesterol drug Cordaptive, which uses the same ultrasound measurement from the now-failed Vytorin study.
In a separate statement, the company said high doses of the experimental obesity treatment taranabant are being cut out of a late-stage study because of higher rates of gastrointestinal side effects, depression and anxiety. The high doses were no more effective than low doses, the company said.
http://biz.yahoo.com/ap/080331/cholesterol_drug.html
February 7, 2008
Merck to Pay $670M to
Settle Fraud Case
Drug Maker Allegedly Paid Kickbacks to Doctors,
Sold Overpriced Drugs to Medicaid
By PIERRE THOMAS, JACK DATE and THERESA COOK, ABC News
Pharmaceutical giant Merck & Company will pay more than $670 million to settle allegations that it overpriced drugs sold to Medicaid and other government health care programs, as well as paid kickbacks to health care providers in exchange for their prescribing the company's medications.
"The settlements do not constitute an admission by Merck of any liability or wrongdoing," a company statement released Thursday said. "Merck believes its pricing and sales and marketing policies and practices were consistent with all applicable regulations and contracts during the relevant time."
Merck provided discounts to doctors and hospitals, provided they bought large quantities of well-known drugs Zocor and Vioxx instead of competing medications, according to allegations in one of two separate lawsuits brought by whistleblowers.
Zocor is a cholesterol-lowering medication, and Vioxx, which Merck pulled from the market in September 2004, was prescribed to treat arthritis and acute pain.
The same discounts were not passed on to millions of patients on the rolls of Medicaid and other government health care programs, the suit, filed in Philadelphia by former Merck employee H. Dean Steinke, alleged.
The Medicaid Rebate Statute requires drug makers to report "best prices" to the government, so that government health programs are able to receive discounts that are available to consumers not receiving government aid. According to the Justice Department, Merck used an exception to that rule, for "nominal" discounts, to cover up substantial discounts offered to hospitals.
The doctors who participated in the overpricing scheme allegedly received millions in illegal kickbacks, according to Steinke's suit.
His suit also alleged that from 1997-2001, the company maintained numerous sales programs that disguised excess payments to physicians as compensation for "training," "consultation" or "market research."
In a statement released through his attorney, Steinke praised the case's investigators and attorneys, who worked out of U.S. Attorney Patrick Meehan's office in the Eastern District of Pennsylvania.
"Finally, Merck has done the right thing. This settlement returned hundreds of millions of Medicaid dollars to federal and state treasuries and stopped illegal marketing practices in their tracks. "
"Merck's chain of command ignored my internal efforts to stop their drug marketing tactics and alerting the government became my only option," his statement continued.
Another whistleblower suit, filed in New Orleans by William St. John LaCort, a physician, alleged Merck carried out a similar reduced-price scheme for its Pepcid medications, which treat stomach acid, heartburn and acid reflux issues.
Merck agreed to pay $399 million plus interest to resolve both the Medicaid Rebate and kickback allegations in the Philadelphia suit, and $250 million plus interest to resolve the claims from the New Orleans case. With interest, the drug maker will shell out a total of more than $670 million.
"Particularly in the wake of Hurricane Katrina, it is critical that precious government resources not be lost to fraud and abuse," said Jim Letten, the U.S. Attorney for the Eastern District of Louisiana, which handled the LaCort case.
The settlement agreements will provide $360 million to the federal government, and 49 states (what happened to the 50th state?) and the District of Columbia will share more than $290 million.
Under the whistleblower statutes, Steinke will receive more than $68 million, and LaCorte will also receive a portion of the state and federal settlement money.
Additionally, the Department of Health and Human Services Inspector General's office has entered into a future-year agreement with Merck as a measure to curtail potential inappropriate conduct in the future.
Merck says the agreement incorporates its existing compliance program, which governs the company's pharmaceutical sales and marketing practices.
"At Merck, we are dedicated to the highest standards of ethics and integrity," Bruce Kuhlik, Merck executive vice president and general counsel, said in the company statement.
"We have taken and will continue to take a leadership position in restoring trust in this industry and in ensuring that our interactions with healthcare professionals support the care of patients and further the public health."
http://abcnews.go.com/TheLaw/story?id=4256550&page=1
February 1, 2008
Federal Grand Jury Probes
Merck's Handling of Vioxx
By HEATHER WON TESORIERO
Wall Street Journal
Merck & Co. is the subject of a federal grand-jury probe into its sales and marketing practices for Vioxx, the painkiller it pulled from the market in 2004, according to a person familiar with the matter.
The health-care-fraud unit of the U.S. Attorney's Office for the District of Massachusetts is investigating whether Merck promoted Vioxx to health-care professionals for uses other than those approved by government regulators, a practice known as off-label marketing, this person said.
Merck declined to comment, said Kent Jarrell, a legal spokesman for the big pharmaceuticals maker.
Merck withdrew Vioxx after a study linked it to increased risk of heart attacks and strokes. The company faced some 27,000 lawsuits from people alleging injuries from the drug. In November, Merck struck a tentative $4.85 billion settlement.
The grand-jury investigation comes at a time when thousands of plaintiffs are weighing whether to enroll in the pending settlement.
"The potential of an indictment can clearly be an incentive for [Merck] to settle civil cases," said Joseph L. Doherty, of Doherty & Quill, a Boston law firm. Mr. Doherty has one Vioxx client, whom he says he hadn't intended to enroll in the settlement. "The mere potential of an indictment probably won't change too many people's minds about whether to enter the proposed settlement."
In February 2007, the Whitehouse Station, N.J., company disclosed in its regulatory filings that the Justice Department issued a subpoena requesting information relating to the company's research, marketing and sales of Vioxx as part of a federal investigation under criminal statutes.
Merck disclosed in that filing that 31 state attorneys general and the District of Columbia are investigating its sales and marketing of Vioxx. The company said it is cooperating with authorities in all of these investigations.
Justice Department probes into drug marketing have resulted in settlements of $875 million with TAP Pharmaceuticals in 2001 and $355 million with AstraZeneca in 2003.
Eli Lilly & Co. is negotiating with federal investigators regarding its marketing of antipsychotic drug Zyprexa.
Write to Heather Won Tesoriero at heather.tesoriero@wsj.com
November 12, 2007
Second Act
Phyllis Berman, Forbes
Robert Clements became a legend making big money in Bermuda insurance for Marsh & McLennan. Now at age 75 he's finally amassed some nice coin for himself--partly at his former employer's expense.
During a 35-year career at Marsh & McLennan, the giant insurance services firm, Robert Clements revolutionized the Bermuda insurance industry. Two insurers he set up for Marsh, ACE Ltd. and XL Capital Ltd., later went public and now have a combined market cap of $34 billion. Clements was also key in creating another successful insurer, Mid Ocean Re. One history of Bermuda insurance calls him a "founding father."
Clements was a hired hand. He got no founder shares in ACE or XL. In 1986, the year after he pulled off his reinsurance innovations, his bonus was bumped up only $25,000. A decade later he left his job running Marsh's investment arm and a year after that left the board of directors. Although he would remain a few more years as a consultant, at age 65 he essentially was out on his own.
Clements started doing insurance deals for himself. In his seventh and eighth decades Clements launched three companies. One, Arch Capital Group, is now about to crack the world's thousand biggest by market cap. This time around his ideas made him and his family a pile that came to several hundred million dollars before substantial charitable donations.
Doing well is the best revenge. The executive who replaced him at Marsh in 1996, Jeffrey Greenberg, later became chief executive--but lost that job in 2004 when then New York Attorney General Eliot Spitzer alleged fraudulent selling practices. Marsh's shares are trading at barely half of what they were five years ago, and its short interest has risen sharply, meaning a lot of people are betting on a further fall. Of Marsh and its continuing troubles, Clements, a quiet, handsome man with piercing blue eyes who dresses casually, says cagily, "Of course, I wish them the best. But I'm hardly surprised, given the problems they have been forced to cope with."
A Chicago native, Clements went to Dartmouth. "I was never particularly ambitious," says the 75-year-old. "I was a mediocre student. When it came to my career, I was most concerned about vacations and retirement than how I was going to make a living." Clements recalls one professor telling him his real major was "poker, beer and class-cutting." Clements joined Marsh in 1960, working as a casualty broker in Canada; his dad, also a Dartmouth grad, was a manager in the firm's Chicago office.
Higher-ups spotted his talent. Clements rose through the ranks and moved to the New York corporate offices to become head of national casualty in 1975. In 1991 he became the parent company's vice chairman, in recognition of his work in the 1980s dramatically expanding the insurance market in Bermuda.
In the years after World War II the self-governing British colony had risen to prominence as a center for captive insurers. These are insurance firms created and wholly owned by a company (often U.S.) to self-insure only that company. Back home the parent company gets a tax deduction for premiums that really are transfers of assets held in reserve for future payouts. In Bermuda the reserves compound in a low-tax regime. Part of Bermuda's lure was avoidance of U.S. state-by-state bureaucracy and quick regulatory approvals. Also, Hamilton, Bermuda is just a three-hour flight from New York.
Clements' opening came in the mid-1980s when a crisis hit the market for excess (or "surplus") insurance, most notably policies underwritten by Lloyd's of London. This coverage kicks in after an underlying "primary" policy pays to its coverage limit. A string of huge claims--asbestos illnesses, hurricanes, the Bhopal gas disaster and other environmental ills, augmented by big jury awards--threatened to bankrupt some insurers. In some cases the excess insurer was being asked to pay for misdeeds that occurred before the primary insurance policy was even in effect.
Doodling on a notepad during a Paris-New York flight in 1984, Clements came up with the idea of creating entirely new terms that came to be known as "occurrence reported" coverage. Customers wanting excess insurance would have to purchase or self-insure large amounts of underlying primary insurance--in some cases covering the first $50 million of claims. New excess policies would cover old claims, say for groundwater contamination, if filed during the new policy period--but only to the limits of the excess coverage. Limits would be limits.
However, Clements' plan, and a similar plan for directors and officers coverage, attracted little interest from traditional insurers or, in the beginning, even from Marsh, his own employer. Marsh said he could set up the operations as long as it didn't have to put in any capital. It would, however, like to get some warrants--long-term options on shares of the new company.
In 1985 Clements persuaded 34 large U.S. companies--such as U.S. Steel, GE, Merck, Dow and Emerson Electric--to invest a total of $285 million to get ACE off the ground. Another $410 million went into XL Capital a few months later. Among the startups' positives: efficient staffing levels, pricing freedom since few competitors offered the product, no lingering claims--and new lucrative high-end products for Marsh's army of brokers.
ACE went public in 1993. Its market cap today is 69 times the money its industrial backers put in. The initial stakes in XL Capital, which went public in 1991, have grown 33-fold. "The biggest thing that has happened in the insurance business since the Chicago fire," one trade pub gushed about Clements' successes. Marsh likely collected several billion dollars from those warrants.
Clements' third company: Mid Ocean Re, a Bermuda reinsurer aimed at catastrophes like hurricanes or collapsed buildings as opposed to longer-gestation situations like asbestos contamination. This time Marsh took a 10% stake for $36 million in the 1992 founding. Clements got a sliver of equity. Marsh's stake paid off nicely when Mid Ocean was sold a few years later to, as it happened, XL Capital.
One night while at dinner with his eldest son, John, a West Coast investment banker, Robert Clements griped that his ideas were being copycatted during the long stretches it took to raise capital for a new company. "The next time you have a great idea, Dad," John said, "you should raise a fund." Replied Clements, who had spent much of his working life putting together deals for his employer, "What's a fund?"
In 1995 Clements started Arch Capital, another reinsurer with money from Marsh, other investors and himself. After he left Marsh, Marsh sold its interest. Clements then sold off Arch's book of existing business, raised $750 million from outside investors and in 2000 relaunched Arch as a public company, getting 4% of the stock as a fee. It was a good time to start a new reinsurance company, since the established ones were so fearful of potential big claims (like the resurgence of asbestos claims) that they refused to offer policies even to their best risks. In 2006 Arch had $3 billion in premiums.
Enough reinsurance. Why not move in on the primary market? Clements raised $1 billion and this year started Ironshore Ltd. The company, which has only 40 employees and works out of a small office in Hamilton, expects to offer policies insuring against storm and earthquake damage in several dozen countries, including the U.S.
In 2004 Clements, his son and two ex-Marsh presidents raised $320 million to launch Integro Corp., which brokers the sale of large, complex policies for corporations. So far, however, Integro has yet to prove itself, amid industry gossip that the expensive force of brokers it recruited--many from scandal-plagued Marsh--has yet to earn its keep. Clements says Integro is growing rapidly and wasn't supposed to make money in its first three years.
On Sept. 11, 2001 Clements, a kayaker, stroked into Long Island Sound to watch the huge black stream of smoke rising 35 miles to the southwest at the World Trade Center. (XL Capital and ACE were among the companies that had exposure to the resulting multibillion-dollar billion casualty settlement.)
The tragic event underscored the peculiar nature of insurance. "What we do is a kind of a craft," he muses. "Underwriting complex, enormous risks for the corporate world is something like a being high-wire walker."
http://www.forbes.com/part_forbes/2007/1112/127.html
September 10, 2007
Audit Cites Overpaid
Medicare Insurers
By ROBERT PEAR, New York Times
WASHINGTON — Private insurance companies participating in Medicare have been allowed to keep tens of millions of dollars that should have gone to consumers, and the Bush administration did not properly audit the companies or try to recover money paid in error, Congressional investigators say in a new report.
The investigators, from the Government Accountability Office, said the money could have been used to reduce premiums or provide additional benefits to older Americans.
Under federal law, Medicare officials are supposed to audit the financial records of at least one-third of the insurance companies each year. But the investigators said the Bush administration had fallen far short of that goal and had never met the “statutory requirement.”
Indeed, they said, the proportion of companies audited by Medicare declined steadily — to 14 percent in 2006 from 24 percent in 2001 — despite a steady growth in Medicare payments to the plans. Those payments now total $75 billion a year, about one-fifth of all Medicare spending.
The Bush administration did not take issue with the findings.
“We welcome constructive suggestions for improving the audit process,” said Tim Hill, chief financial officer at the Centers for Medicare and Medicaid Services. An agency spokesman said it might need additional legislative authority to clarify its power to recoup money from insurers.
Administration officials have strongly encouraged insurance companies to participate in Medicare and have urged beneficiaries to enroll in private plans. Some plans, known as Medicare Advantage plans, cover a wide range of services, including doctor’s visits and hospital care. Others provide only prescription drug benefits.
The purpose of the audits is to determine whether insurers correctly calculated their costs and premiums and delivered the services promised to Medicare beneficiaries. Insurers typically receive fixed monthly payments, set in advance, for serving Medicare patients. Drug plans can receive extra payments if their costs exceed their expectations.
Likewise, if private plans hold down costs, they are supposed to share some of the savings with beneficiaries and the government.
In 2003, Medicare audited 49 of the 220 organizations participating in the program. Auditors found significant errors at 41 companies, but Medicare officials took no action on the findings.
As a result of the errors, the auditors said, insurers kept “$59 million that beneficiaries could have received in additional benefits, lower co-payments or lower premiums.” The report did not identify the companies.
Paul Caban, assistant director of the financial management team at the Government Accountability Office, said the Medicare agency’s response was puzzling. “What is the value of conducting these audits if you do not act on the findings?” Mr. Caban asked.
Two influential members of Congress expressed dismay.
“Congress required audits for good reason,” said Senator Charles E. Grassley of Iowa, the senior Republican on the Finance Committee. “There’s a lot of taxpayer money being spent, and we need to know where it goes. We also need consequences for spending that isn’t proven to serve beneficiaries.”
Mr. Grassley said Medicare officials had done “a poor job of bringing accountability here,” and he added, “I want to see concrete action to fix this.”
Representative Pete Stark, the California Democrat who is chairman of the Ways and Means Subcommittee on Health, said the Medicare agency “is not doing its job to protect beneficiaries.”
In separate action, the Bush administration is vigorously pursuing money that it says is owed to insurance companies by Medicare beneficiaries. The Medicare agency has sent letters to more than 135,000 people saying they still owe premiums for prescription drug coverage provided in 2006. In most cases, the premiums were supposed to have been withheld from monthly Social Security checks, but the government withheld the wrong amounts or nothing at all.
Kerry Weems, acting administrator of the Centers for Medicare and Medicaid Services, said, “I am intently focused on this matter and will make it a priority to correct the errors and minimize them in the future.”
Insurers submit bids to Medicare each year, saying how much they expect to be paid to provide specified benefits. If the government accepts these proposals, it signs contracts with the insurers.
The Medicare agency contends that it does not have the legal authority to force insurers to return money to beneficiaries or to the Medicare trust fund when auditors find “errors, incorrect or unreasonable assumptions or other misstatements” in company bids.
The Government Accountability Office insisted that Medicare officials “had the authority to pursue financial recoveries,” but did not use it.
Medicare hires private firms to conduct many audits. Insurers said that in many cases the auditors were not well versed in the intricacies of Medicare. Moreover, they said, Medicare has not provided clear guidance on how to define important items like administrative costs.
Medicare officials said they found significant errors in bids from 18 of the 80 organizations audited last year. But the Government Accountability Office said “there is a low probability of the audits identifying intentional misrepresentations,” because Medicare relies heavily on actuaries who prepare the bids to certify their accuracy.
Under a 2001 law, every federal agency is supposed to have a program for “recovering any amounts erroneously paid to contractors.”
The Bush administration told the Government Accountability Office that “general federal contract laws do not apply to the payments made under Medicare contracts.”
What the critics are saying about Michael Moore’s new film...
SiCKO
"Three years after winning Cannes' top prize for 'Fahrenheit 9/11,' docu helmer and agent provocateur Michael Moore returns to the Croisette with more polemics-as-performance-art in 'Sicko,' an affecting and entertaining dissection of the American health care industry, showing how it benefits the few at the expense of the many. Pic's tone alternates between comedy, poignancy and outrage as it compares the U.S system of care to other countries."
-- Alissa Simon, Variety
"Moore has a genius for confrontational stunts — demanding a meeting with General Motors Chairman Roger Smith, chatting up an addled Charlton Heston on gun control, buttonholing Congressmen to see if any of them had actually read the Patriot Act — but the Cuba jaunt tops them all. It begins when he hears Congressional testimony indicating that detainees at Guantanamo were getting free colonscopies [sic.] and nutrition counseling."
-- Richard Corliss, Time Magazine
"Three years after conquering the Cannes Film Festival and winning the Palme d’Or for 'Fahrenheit 9/11,' Michael Moore has returned the amour big time with 'Sicko,' his most fluid provocation to date. A persuasive, insistently leftist indictment of the American health care system, as well as a funny valentine to all things French — and many things Canadian, British and Cuban — the film shows that while Mr. Moore remains a radical partisan, he has learned how to sell his argument with a softer touch. He’s still the P. T. Barnum of activist cinema, but he no longer runs the entire circus directly from the spotlight."
-- Manhola Dargis, New York Times
"The revolutionary filmmaker, who shattered all box-office records for a documentary with his last effort, 'Fahrenheit 9/11,' has returned to the Cannes Film Festival with another log to throw on the bonfire, his new film, 'Sicko.' Perhaps the most improbable 116 minutes ever conceived, it is a film about . . . health insurance!"
-- William Booth, Washington Post
"After the screening, several hard-nosed U.S. critics and journalists admitted to crying during the film."
-- Anthony Kaufman, Wall Street Journal
"It's very much in the Michael Moore vein — hilarious, but I was crying through about a third of it."
-- Peter Brunette, Boston Globe
" 'Sicko' has been rapturously received by audiences and critics at Cannes..."
-- Jill Lawless, Associated Press
" 'Sicko' is not just an indictment of an indefensible health care industry in the U.S. It's a rejoinder for those who think we can fix the soulless monster by tinkering with an unconscionable system that puts us further in thrall to those who created the crisis."
-- Rose Ann DeMoro, Huffington Post
"Filmmaker Michael Moore's brilliant and uplifting new documentary, 'Sicko,' deals with the failings of the U.S. healthcare system, both real and perceived. But this time around, the controversial documentarian seems to be letting the subject matter do the talking, and in the process shows a new maturity."
-- Roger Friedman, Fox News
"...a very strong and very honest documentary about a health system that's totally corrupt and that is without any care for its patients."
-- Stephen Schaefer, Boston Globe
DON’T MISS THIS MOVIE!
See also: Disecting ‘Fristy’; Nests of the Insurance Vampires; Blessed Are The Peacemakers; Freedom To Sing; The Eagle Hooded: The 9-11 Coverups
March 7, 2007
Merck's Murky Dealings: HPV Vaccine Lobby Backfires
by Terry J. Allen, Special to CorpWatch
In early January Marilyn Canavan and Andrea Boland, two legislators from wintry Maine, traveled to the tourist resort of Marco Island, Florida, for a conference organized by Women in Government (WIG), a non-profit organization.
The annual, bi-partisan event for elected women in state governments around the U.S. had a number of issues on its agenda from higher education to the state of women in politics.
One focus, preventing cervical cancer, included information on Gardasil a new vaccine manufactured by pharmaceutical giant Merck, that protects against the two human papilloma virus (HPV) strains that cause 70 percent of cervical cancers.
"The tenor of presentations - they were not discussions ... (they) seemed one-sided to me," said Canavan, a four-term legislator. "I remember thinking as I was leaving the meeting, 'I just don't want to do this ... we need to have public dialogue.'"
Boland also reported "a pull to get on board [promoting vaccination]... and when I raised questions, the response was 'Do you want your daughter to die of cancer?'"
Boland, a first-time legislator, joined Canavan, a WIG state director, at a small planning session, where she was taken aback by the extent to which corporations influenced WIG. "When discussing what the agenda for next year would be," participants were told to 'wait to see who's funding things.'" Similarly before fixing the program for next year, they "had to see what the sponsors want," said Boland.
Boland's suspicions were further raised by a casual conversation one evening over a glass of wine with one of the conference speakers, Boston pop singer Christine Baze. "She was a young attractive woman with a beautiful voice and a moving tale of surviving cervical cancer," said Canavan. Baze mentioned that a pharmaceutical company had paid for her appearance.
Both legislators believed that preventing cervical cancer was a worthy project, but it wasn't until a month later that Canavan and Boland learned that, more than making the vaccine available, Merck and WIG were campaigning to make Gardasil mandatory for all 11-12 year old girls.
Then, after the governor of Texas, Rick Perry, passed an executive order mandating vaccination for all girls entering sixth grade, Canavan learned something that shocked the former director of the State Ethics Commission: She discovered that WIG had taken funding from Merck.
On March 2nd, Canavan resigned from WIG. "An organization that stands to profit, like a pharmaceutical company, shouldn't be driving the health agenda in public realm," said Canavan. "You see so many front organizations, I'm not going to say Women in Government is one, but it matters who's funding them. My early training emphasized doing the right thing and being guided by conscience."
What Boland and Canavan had come to realize was that the Florida conference presentations had been part of a state-by-state lobbying campaign spearheaded by WIG to support Merck's efforts to make Gardasil mandatory. WIG members were well placed to promote bills in state legislatures or help convince governors to promote that agenda. But revelations of money trails and the rush to make a new vaccine mandatory created a backlash and forced Merck, on February 20th, to publicly abort its lobbying campaign for mandatory vaccination of school girls....
Launching the Vaccine
Cervical cancer affects 10,000 women in the United States every year, and kills 3,700. The toll is far greater in the developing world, where most women lack the diagnostic Pap tests that catch signs of cancer when it is still treatable.
New Jersey-based Merck, one of the world's largest pharmaceutical companies had been hoping to reap billions of dollars from Gardasil. Most of the world's sexually active men and woman and every child over 9 years of age are potential customers for the expensive course of injections.
A quick and successful launch was crucial, both for Merck's failing financial health and because rival GlaxoSmithKline was developing a similar HPV vaccine. Things looked good for Merck when the U.S. Food and Drug Administration (FDA) agreed to fast-track Gardasil in February 2006 and approved it in June, pronouncing the vaccine effective and safe for girls as young as nine. Soon after the FDA approved Gardasil, WIG was helping introduce bills in some 20 states, with Merck actually writing the legislation in at least one state: Florida.
Merck also launched a subtly frightening advertising campaign featuring quick images of vital young girls: a young drummer, a child with a skateboard, two playing basketball, and three skipping rope. The drummer says: "I want to be one less woman who will battle cervical cancer," as she starts tosses her drumsticks and starts to play, the others spell out a chant: : "O-N-E-L-E-S-S. I want to be one less. One less."
Merck's targeting of young girls and eventually boys who are carriers and on rare occasions develop HPV-caused cancers is based in rational public health principles. Since the vaccine is only effective in preventing, not treating HPV infection, it needs to be dispensed before exposure to the viruses. And while 11-12 year old girls are unlikely to be sexually active, policy makers could make their entry into middle school contingent on vaccination in the same way that 5-6 year olds are required to be vaccinated for polio and measles before entering elementary school. If officials waited until the more common age of sexual initiation, around 16, public health officials would not have the leverage to compel vaccination.
As with any new drug, concerned parents and public health officials had to balance Gardasil's obvious promise against potential problems. They understood that Merck's contention that its HPV vaccine is safe and effective was only as sound as its data and only as solid as the independence and rigor of the FDA review process that approved the drug. But while most people applauded the new protection Gardasil offered, both experts and consumers found good reasons for waiting before making the vaccine mandatory. (They did not include fears that all vaccines are dangerous, or that protecting against a sexually transmitted disease encourages girls to have sex.)
The data Merck presented to the FDA were based on some 21,000 test subjects between ages 16 and 26, half of whom received Gardasil and half a placebo. All subjects, followed for up to five years, were found free of pre-cancerous changes from the targeted strains.
Some critics pointed out that the test period was too short to assess long-term effects and efficacy. In fact, the studies on children, who often react differently to drugs, were shorter yet, and smaller. Only 1,184 subjects in the nine to 15 year-old age test group got Gardasil, and they were followed for 18 months, according to New Scientist magazine. A Merck spokesperson refused to break down the data further to reveal how many of that small sample were below the age of puberty.
And then there is the possibility that, given time and real-world conditions, side effects will emerge. FDA briefing papers noted a small increase in birth defects in the babies of women given the vaccine within 30 days of becoming pregnant over those who took a placebo. The number, while not establishing causality, triggered an FDA recommendation that pregnant women not be vaccinated. The background documents also raised questions about whether selectively targeting a few HPV viruses (there are more than 100) would "advantage others." Another concern "was the potential for Gardasil to enhance disease among" subjects already infected "with vaccine-relevant HPV."
These kinds of concerns are not necessarily alarming or unusual for a new drug, According to a 2002 study in the Journal of the American Medical Association, "The safety of new agents cannot be known with certainty until a drug has been on the market for years. Serious ADRs [adverse drug reactions] commonly emerge after Food and Drug Administration approval."...
A Controversy in Texas
But new drugs, and vaccines in particular, raise not only promise but fear. And touching as it did on issues of teenage sexuality, Gardasil was particularly controversial.
Religious conservatives, already concerned that vaccination would encourage sexual activity, opposed making vaccination mandatory. "My main reason is that it is parents that have the right to decide when is the appropriate time to discuss sexuality," said Debi Vinnedge, the head of Children of God for Life. "One of my young grandchildren is more mature, but there is nothing that I can say to these kids" that won't send the wrong message.
It was perhaps the potential controversy in mind that Texas governor Rick Perry took the bull by the horns and circumvented abstinence junkies, public discussion, and the legislature to issue an executive order requiring vaccination for all girls entering the sixth grade, unless parents opted out.
Perry's February unilateral decision sparked a public relations disaster that Merck's orchestrated ad campaigns, lobbying efforts through WIG, and courting of the religious right had failed to anticipate.
Perry's February order also raised suspicions over his politics (the governor has previously shown little interest in health policies), his speed (just months after the FDA approved the vaccine and before all the data had been published), the financial arrangements (Merck got a statewide monopoly without concessions and without negotiating a discount for clinics and poorer Texans) and the stealth timing (Perry issued the order late on Friday before Super Bowl Sunday, the nation's biggest sporting event).
Questions about cronyism soon led to Perry insiders connected to Merck and to WIG: The WIG state director is the mother-in-law of Perry's current chief of staff, and his former chief of staff is now one of Merck's three Texas lobbyists. A Merck executive served on WIG's Business Council in 2006.
And then there was the money trail. In September, greasing the skids for Gardasil's November public relations blitz, "Merck's PAC spent $74,250 in a single day to influence elections in five states. It directed 60 percent of that money to 82 candidates in Texas," according to Lobby Watch, a newsletter put out by Texans for Public Justice. (A Public Action Committee or PAC is an advocacy group that buys political advertisements to support elections or legislation).
In late February, less than three weeks after Perry's executive order to make the vaccine mandatory for all Texas schoolgirls entering sixth grade, Merck abandoned the lobbying campaign.
"Our goal is to prevent cervical cancer," Dr. Richard M. Haupt, executive director for medical affairs in Merck's vaccine division told the Associated Press. "Our goal is to reach as many females as possible. Right now, school requirements and Merck's involvement in that are being viewed as a distraction to that goal."...
A Financial Shot in the Arm
Facing the storm of controversy that threatened to overwhelm news about preventing cancer, Merck's president for vaccines, Margaret McGlynn, defended her company. "Each and every day that a female delays getting the vaccine there is a chance she is exposed to human papilloma virus," she told the New York Times.
But Merck, like any corporation, is motivated by more than altruism. If Gardasil becomes routine, the $360-$400 course will generate annual sales of $3.2 billion by 2010.
Merck needs this financial shot in the arm to offset liabilities caused by Vioxx, its arthritis drug that may have caused almost 28,000 deaths, according to FDA estimates. Merck now faces some 4,000 lawsuits and potentially billions in payouts. In one Texas liability trial, lawyers produced documents and e-mails from Merck scientists discussing Vioxx's potential heart risks as early as 1997, more than two years before it went on the market.
This history of hiding data has done little to reassure Gardasil skeptics. "It used to be that funding for research was provided by government," says Canavan, the Maine legislator. "But now it comes from private corporations that stand to gain and the information can be - I won't say skewed - but made to work for the company."
What is clearly not working for Merck are the controversies around Gardasil that have derailed corporate plan to make vaccination mandatory and to capture the market before Glaxo releases its own vaccine.
The last few years have not gone smoothly for one of the world's biggest drug companies. On September 30, 2004, after it became known that Vioxx was doubling the rate of heart attacks and strokes, Merck withdrew the painkiller and saw its stock plummet nearly 27 percent. Taking the drug off the market wiped out $2.5 billion in annual sales.
In 2005, Merck's new chief executive officer Richard Clark announced a plan to cut the company's world-wide work force by 11 percent or 7,000 jobs and to close or sell five of its manufacturing facilities. The company's 2005 sales were down four percent and its net income had fallen by 20 percent. The company's financial woes will not be eased by the fact that its patent for cholesterol drug Zocor, with $5 billion in sales, expired in 2006, while patents on other best selling drugs, including, Folsom and Cozaar, are nearing expiration.
Merck's also announced on February 14 that it had signed an agreement that essentially brings to a close the U.S. Internal Revenue Service's (IRS) examination of the company for the period 1993-2001. Under the agreement, the final net cash cost to Merck is expected to be approximately $2.3 billion which covers federal tax, net interest after federal tax deductions and penalties." Merck, noted the "reasonableness" of the IRS settlement and said that it had reserved the funds so the payment would not impact 2007 earnings.
"As CEO, my priorities are clear," says Clark, "meeting the needs of patients and building shareholder value."
Those priorities are particularly hard to juggle given America's love-hate relationship with pharmaceuticals. In 2004, 82 percent of the U.S. population reported that they had taken at least one prescription drug, over-the-counter medication, or dietary supplement in the previous week; 30 percent of respondents reported using five or more, according to a study by the Sloan Epidemiology Center at Boston University. Even kids are consuming drugs in great quantities. In 2005, according to an analysis performed by Medco Health Solutions for the New York Times, "approximately 1.6 million U.S. teenagers and children (almost 300,000 of whom were under 10) were given at least two psychiatric drugs in combination."
At the same time as they are popping pills, Americans are widely distrustful of a pharmaceutical industry that has a long record of marketing wonder drugs with misleading advertising and dangerous side-effects. A 2007 health poll by the Kaiser Family Foundation found that fewer than 18 percent of Americans "say they can trust what pharmaceutical companies say in their ads most of the time." Some 70 percent "agree that drug companies put profits ahead of people."
By choosing to promote making Gardasil mandatory, Merck fell deep into the chasm between the public's desire to see drugs as the cure for all ills and its profound skepticism that pharmaceutical companies put the public's interests before profits.
"When we lose trust in company like pharmaceuticals or a group like Women in Government," said Canavan from her home in Maine, "we start to become suspicious about everything. We need to have public dialogue. The point is not that the vaccine is bad, but that the public agenda has all been company-driven."
http://www.corpwatch.org/article.php?id=14401
March 3, 2007
Jury: Merck was negligent, committed consumer fraud
By Linda A. Johnson, Associated Press
TRENTON, N.J. — A state jury dealt Merck (MRK) a mixed verdict Friday in the drugmaker's latest trial over its former painkiller Vioxx.
The Atlantic City jury ruled Merck was negligent and did not properly warn doctors about the cardiovascular risks in the case of one former Vioxx user who survived a heart attack. The ruling sets the stage for a second phase of the trial, starting Monday, to consider whether Frederick "Mike" Humeston, 61, of Boise, deserves compensatory and punitive damages.
The jury ruled against the second plaintiff in the trial, deciding Merck was not negligent in its marketing of Vioxx but had violated New Jersey's consumer fraud law. That means Kathleen Hermans Messerschmidt, the widow of Brian Hermans of Waupaca, Wis., at best can recoup three times the amount he spent on Vioxx prescriptions. Hermans died at age 44 after having a heart attack on Sept. 15, 2002.
Merck said the jury's split verdict essentially means jurors decided Merck gave proper warning about Vioxx risks before Hermans died of a heart attack, but not before Humeston suffered his heart attack a year earlier. In between, Merck put a stronger warning in the detailed package insert for Vioxx, under pressure from federal regulators.
Prior to this trial, Merck had won eight cases and lost four in the massive litigation over its former blockbuster arthritis pill. Another trial with two plaintiffs ended in a mistrial in January.
“We're obviously quite pleased about the result in the Hermans case," said Hope Freiwald, a legal spokesperson for Merck. "We've said many times that we believe that Merck acted appropriately with regard to the information it conveyed about Vioxx."
Humeston's lawyer, Christopher Seeger, said the jurors still voted unanimously, in the cases of both plaintiffs, that Merck "intentionally misled the medical community" and omitted important information about the risks of Vioxx. Even with only a small payout to Hermans' widow, he said Merck will be paying millions to the plaintiffs for attorneys' fees and costs.
"It's not a mosquito bite," Seeger said.
Merck pulled Vioxx from the market in September 2004 after its own research showed the drug doubled the risk of heart attack and stroke.
In the unusual court proceeding in Atlantic City, jurors had been asked to consider Merck's conduct in marketing and disclosing risks of Vioxx without hearing any testimony over whether Vioxx caused the two men's heart attacks.
The trial's second phase, scheduled to be completed in just a week, will cover how much Hermans spent on Vioxx but will focus primarily on evidence about Humeston's health and whether Vioxx triggered his heart attack.
Humeston, who survived a Sept. 18, 2001 heart attack, lost his first trial against Merck in 2005. Merck lawyers contended that Humeston had heart disease and that Vioxx had nothing to do with his heart attack.
Humeston was granted a second trial because of new evidence that even short-term Vioxx use could increase cardiac risks. Humeston took Vioxx for about two months for knee pain; Merck has repeatedly insisted that Vioxx didn't increase cardiac risks until after 18 months of use.
"We still have to win phase 2, but I'm thrilled" with Friday's verdict, Seeger said. "We thought the first verdict was not representative of the evidence and that's been vindicated in this verdict so far."
In previous Vioxx trials, jurors deliberated only after hearing testimony about whether Merck properly disclosed what it knew about the risks of Vioxx and whether the painkiller caused a particular plaintiff's heart attack or stroke.
In this trial, the jury decided whether Merck was potentially liable for negligence or violation of New Jersey's consumer fraud law without hearing testimony about the plaintiffs' health — so far.
That strategy was decided by New Jersey Superior Court Judge Carol Higbee in an effort to expedite Vioxx trials. Higbee is overseeing more than half of the roughly 28,000 lawsuits Merck faces over the painkiller.
Jury selection in Atlantic City started Jan. 16 and the trial began with opening arguments on Jan. 22.
The jury, made up of five men and three women, deliberated for about three hours Thursday and most of the day on Friday.
Merck shares rose 20 cent to close at $44.19 in trading on the New York Stock Exchange.
FIND MORE STORIES IN: Wisconsin | New York Stock Exchange | Atlantic City | Merck | Boise | Vioxx | Frederick
September 25, 2006
Merck Insurance Carriers Jump Ship Over Vioxx Disaster
According to Merck's August 7, 2006, SEC filing, "At this time, the Company believes that its insurance coverage with respect to the Vioxx Lawsuits will not be adequate to cover its defense costs and any losses."
In addition, Merck says it has not established any reserves for potential liability relating to the Vioxx lawsuits or investigations, including for those cases in which a verdict has been entered against the company, and are now in post-verdict proceedings or on appeal.
According to the filing, Merck has product liability insurance for claims brought in the Vioxx Product Liability Lawsuits with upper limits of about $630 million after deductibles and co-insurance. This insurance provides coverage for legal defense costs and potential damage amounts that have been or will be incurred in connection with the Vioxx Product Liability Lawsuits.
he company says it has Directors and Officers insurance coverage applicable to the Vioxx Securities Lawsuits and Vioxx Derivative Lawsuits with stated upper limits of about $190 million and fiduciary and other insurance for the Vioxx ERISA Lawsuits with stated upper limits of approximately $275 million.
However, the filing states, the amounts actually recovered under the policies may be less than the amounts specified. It seem there are now disputes with certain insurers about the availability of some or all of this coverage and there are likely to be more disputes, according to Merck.
In fact, the company’s upper level excess insurers, which provide excess insurance potentially applicable to all Vioxx lawsuits, have commenced an arbitration seeking to cancel those policies, to void all obligations under those policies, and to raise other coverage issues with respect to Vioxx lawsuits.
But not to worry. "Merck intends to contest vigorously the insurers’ claims and will attempt to enforce its rights under applicable insurance policies," the filings says.
For its part, as of December 31, 2004, Merck had established a reserve of $675 million solely for its future legal defense costs related to Vioxx. During 2005, according to the SEC filing, the company spent $285 million in legal defense costs related to Vioxx (i) Product Liability Lawsuits, (ii) Shareholder Lawsuits, (iii) Foreign Lawsuits, and (iv) Investigations.
In the fourth quarter of 2005, Merck recorded a charge of $295 million to increase the reserve for Vioxx legal defense costs to $685 million at December 31, 2005.
"Unfavorable outcomes in the Vioxx Litigation," the SEC filing concludes, "could have a material adverse effect on the Company’s financial position, liquidity and results of operations."
Being insurers are fighting against payment of damages before even one case is settled, it does not take a financial genius to figure out that Merck is in for big trouble.
According to the SEC filing, as of June 30, 2006, Merck has been served or is aware that it has been named as a defendant in approximately 14,200 lawsuits, which include approximately 27,100 plaintiff groups, alleging personal injuries resulting from the use of Vioxx .
Of these cases, Merck says, approximately 5,700 lawsuits representing approximately 16,100 plaintiff groups are or are slated to be in the federal Multidistrict Litigation (MDL), and approximately 7,100 lawsuit representing approximately 7,100 plaintiff groups are included in a coordinated proceeding in New Jersey Superior Court before Judge Carol Higbee.
These lawsuits include allegations related to cardiovascular events, thrombotic events, gastrointestinal bleeding or kidney damage.
Merck has also been named as a defendant in close to 200 putative class actions alleging personal injuries or seeking (1) medical monitoring due to class members’ use of Vioxx , (2) disgorgement of profits under unjust enrichment theories, and (3) remedies under state consumer fraud and fair business practice statutes, including recovery for the cost of Vioxx purchased by individuals and third-party payors such as union health plans.
The lawsuits filed in the state courts of New Jersey, California, Texas, and Pennsylvania, have all been transferred to a single judge in each state for coordinated proceedings.
On February 16, 2005, the Judicial Panel on Multidistrict Litigation transferred all Vioxx Product Liability Lawsuits in federal courts nationwide into one MDL for coordinated pre-trial proceedings in the US District Court for the Eastern District of Louisiana before Judge Eldon Fallon.
Judge Fallon has informed the litigants that he intends to try a series of cases through 2006, in the following Vioxx categories: (1) heart attack with short term use; (2) heart attack with long term use; (3) stroke; and (4) cardiovascular injury after April 2002 when the labeling on Vioxx was changed to include the results of the VIGOR trial.
Legal experts say Merck took a major hit on July 29, 2005, when a New Jersey state court certified a nationwide class of third-party payors, such as unions and health insurance plans, who paid for Vioxx used by their plan members. The named plaintiff seeks recovery of purchase costs, plus penalties, based on allegations that the class members paid more for Vioxx than they would have had they known the drug's alleged risks.
Merck appealed the ruling and on March 31, 2006, the New Jersey Superior Court, Appellate Division, affirmed the class certification. The New Jersey Supreme Court recently decided to exercise its discretion to hear the appeal of the appellate court decision.
The trial in this case is currently scheduled to begin in March 2007, and according to Merck, it is not known whether the Supreme Court’s decision will affect the trial date.
Merck has also been named as a defendant in separate lawsuits brought by the Attorneys General of Alaska, Louisiana, Mississippi, Montana, Texas, and Utah, that claim Merck misrepresented the safety of Vioxx and seek reimbursement for (1) the cost of Vioxx purchased or reimbursed by the state; (2) all sums paid by the state for treatment of persons injured by Vioxx; (3) damages under various common law theories; and (4) remedies under various state statutory theories, including state consumer fraud, fair business practices, or Medicaid fraud, including civil penalties.
Even if the insurance carries end up covering the Vioxx cases, critics say how far is one or two billion dollars worth of insurance tops, going to go when there are states like Texas seeking $168 million in damages and additional civil penalties. Texas Attorney General, Greg Abbott, says he can prove total damages in excess of $250 million including treble reimbursement of $56 million, or $168 million, for five years of Vioxx prescriptions purchased in Texas.
In addition to the product liability lawsuits, Merck and various current and former officers and directors are named defendants in various putative class actions and individual lawsuits filed under the federal securities laws, all of which have been transferred to the US District Court for the District of New Jersey before Judge Stanley Chesler for inclusion in a nationwide shareholder MDL.
The plaintiffs request certification of a class of purchasers of Merck stock between May 21,1999 and October 29, 2004, and allege that the defendants made false and misleading statements regarding Vioxx in violation of the Securities Exchange Act of 1934, and seek unspecified compensatory damages and the costs of lawsuit, including attorneys’ fees.
The complaint also asserts a claim against certain defendants relating to their sale of Merck stock and includes allegations that certain defendants made incomplete and misleading statements in a registration statement and certain prospectuses filed in connection with the Merck Stock Investment Plan, a dividend reinvestment plan.
The Merck defendants have filed a motion to dismiss the complaint which was still pending at the time of the SEC filing on August 7, 2006.
On August 15, 2005, a lawsuit was filed in Oregon state court under Oregon securities law, by the State of Oregon on behalf of the Oregon Public Employee Retirement Fund against Merck and certain current and former officers and directors alleging damages in connection with its purchases of Merck common stock at artificially inflated prices due to Merck's violations of law related to disclosures about Vioxx .
On July 19, 2006, the Court denied a motion by Merck to dismiss Oregon's complaint and according to Merck's SEC filing, the current and former officers and directors have entered into a tolling agreement in exchange for plaintiffs’ dismissal, without prejudice, of the claims against them.
Various federal shareholder derivative actions have been transferred to the Shareholder MDL and consolidated for all purposes by Judge Chesler. The consolidated complaint arises out of the same factual allegations that are made in the other Vioxx securities lawsuits.
The derivative suits assert claims against certain members of the Board past and present, and certain executive officers, for breach of fiduciary duty, waste of corporate assets, unjust enrichment, abuse of control and gross mismanagement.
On May 5, 2006, Judge Chesler granted a motion by defendants to dismiss the complaint and denied plaintiffs' request for leave to amend their complaint, and plaintiffs have appealed to the US Court of Appeals for the Third Circuit.
On October 29, 2004, according to the SEC filing, two shareholders made a demand on the Board to take legal action against former Chairman, President and CEO, Raymond Gilmartin, and other individuals for causing damage to the company with respect to the improper marketing of Vioxx .
In response to the shareholder's demand letter, the Board determined at its November 23, 2004 meeting that the Board would take the request under consideration and it remains under consideration.
The Board, the SEC filing states, has recently received another shareholder letter demanding that the Board take legal action against the Board and Merck management for causing damage to the company relating to the company’s improper marketing of Vioxx .
In addition, various federal putative class actions filed against Merck and certain current and former officers and directors have been transferred to the Shareholder MDL and consolidated for all purposes. The consolidated complaint asserts claims on behalf of certain current and former employees who are participants in Merck's retirement plans for breach of fiduciary duty under the Employee Retirement Income Security Act.
The allegations are similar to those contained in the other securities lawsuits. On October 7, 2005, defendants moved to dismiss the complaint, and on July 11, 2006, Judge Chesler granted in part and denied in part the motion to dismiss.
The court dismissed the claim of breach of fiduciary duty based on continued investment in Merck stock as to all defendants except the 5 individuals who were members of Merck’s Management Pension Investment Committee during the purported class period.
The court dismissed the claim for breach of fiduciary duty based on failure to provide complete or accurate information to participants to the extent it related to specific communications cited in the complaint, but declined to dismiss the claim before discovery to the extent plaintiffs allege that adverse information was withheld from participants.
The court also dismissed the claim for failure to monitor as to all defendants except the members of the Compensation and Benefits Committee of Merck’s Board of Directors who had supervisory responsibility for the MPIC.
Finally, the court declined to dismiss the claim for co-fiduciary liability, absent factual development, but dismissed as duplicative the claim for knowing participation in breach of fiduciary duty.
As far as a slow down in the continuous stream of lawsuits, Merck is no doubt hoping to see a light at the end of the tunnel soon because Vioxx was pulled off the market on September 30, 2004, and some states have a 2-year statute of limitations requiring that lawsuits must be filed within two years after the plaintiffs learned or could have learned of their potential cause of action.
As a result, experts say September 30, 2006 is a deadline for filing Vioxx cases in many states. However, they also note that the laws governing statutes of limitations are complex, can vary from state to state, and might be affected by pending class actions. For instance, some states have 3-year statutes of limitations, and some even longer.
Legal analysts predict there will be arguments raised about the proper application of these statutes, but say ultimately the decisions will be up to the federal and state judges presiding over the individual cases.
But then Merck attorneys know that September definitely will not be the end date for filing Vioxx lawsuits because according to Merck's SEC filing, as of June 30, 2006, the company has entered into agreements with about 5,800 plaintiffs to toll the statute of limitations, so the September 30, 2006 cut-off date would not apply in those cases.
The tolling agreement with the MDL Plaintiffs’ Steering Committee establishes a procedure to halt the running of the statute of limitations as to certain categories of claims arising from the use of Vioxx by non-New Jersey citizens.
The agreement applies to individuals who have not yet filed lawsuits and only to those claimants alleging injuries resulting from a thrombotic cardiovascular event that results in a myocardial infarction or ischemic stroke. The agreement requires any tolled claims to be filed in federal court.
And although its never mentioned much, Merck has been named as a defendant in litigation relating to Vioxx all over the globe including several countries in Europe as well as Canada, Australia, Brazil, Turkey, and Israel.
In addition, based on media reports and other sources, Merck says, it anticipates that additional Vioxx Product Liability Lawsuits, Vioxx Shareholder Lawsuits and Vioxx Foreign Lawsuits will be filed against it and certain current and former officers and directors in the future.
And that may be true, because critics says there should be another shareholder lawsuit filed against Merck Management this month for flushing another $21 million in profits down the toilet by paying a committee to publish a bogus 1,700 page report to supposedly absolve Merck Management of any wrongdoing.
But in any event, Merck's legal woes are not limited to civil court proceedings. In November 2004, Merck was advised by the SEC that it was commencing an informal inquiry concerning Vioxx, and on January 28, 2005, Merck announced that it received notice that the SEC issued a formal notice of investigation.
Also, according to the company's SEC filing, Merck has received subpoenas from the US Department of Justice requesting information related to the research, marketing and selling activities of Vioxx in a federal health care investigation under criminal statutes.
Merck also says it has received a number of Civil Investigative Demands from a group of Attorneys General from 31 states and the District of Columbia who are investigating whether Merck violated state consumer protection laws when marketing Vioxx.
And finally, to end on a happy note, the SEC filing says, investigations are being conducted by local authorities in certain cities in Europe in order to determine whether any criminal charges should be filed related to Vioxx.
"The Company," Merck states, "cannot predict the outcome of these inquiries; however, they could result in potential civil and/or criminal dispositions."
*************
More information for injured parties can be found at Lawyers and Settlements.com
http://www.lawyersandsettlements.com/
Evelyn Pringle
evelyn.pringle@sbcglobal.net
(Evelyn Pringle is a columnist for OpEd News and an investigative journalist focused on exposing corruption in government and corporate America)
http://www.scoop.co.nz/stories/HL0609/S00354.htm
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