US - The New York State Common Retirement Fund is suing pharmaceutical company Merck & Co. Inc over US$171m in losses suffered by the fund on Merck stock after the company withdrew its Vioxx arthritis drug because of safety concerns.
New York State Comptroller Alan G. Hevesi, sole trustee of the US$120bn fund, filed a securities fraud class action lawsuit in the United States district court for the District of New Jersey. He also filed related motions in federal court in the eastern district of Louisiana.
“Merck must be held legally responsible for its actions,” Hevesi said in a statement.
“Those actions have put lives at risk and cost shareholders billions of dollars.”
The actions allege violations of federal securities laws resulting from Merck’s failure to disclose material information concerning the safety profile of its arthritis drug, Vioxx.
Plaintiffs claim Merck new, but failed to disclose, that a growing body of evidence demonstrated that patients who used Vioxx were at an increased risk of adverse cardiovascular reactions, including hear attack, stroke and death.
The company announced the withdrawal of the drug on September 30 this year. The fund claims the “abrupt” decision to take it off the market contradicted its prior public announcements “repeatedly touting the safety of Vioxx”.
Following the withdrawal of Vioxx, Merck’s stock price plummeted by 26%, resulting in billions of dollars in losses for investors, the New York fund said.
The Comptroller is represented by law firms Abbey Gardy, LLP and Entwistle & Capppucci LLP.
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