Investors suing Merck over its handling of the pain medication Vioxx got a boost Tuesday from the U.S. Supreme Court.
In a case that hinged on when a two-year statute-of-limitations clock started ticking, the court backed lawyers suing Merck & Co. Inc. in a class-action securities-fraud lawsuit.
Merck, which has substantial operations in this area, pulled Vioxx from the market in 2004 because it increased heart problems. It expects to have completed $4.85 billion in payments to patients to resolve injury claims by the end of the year, said Ron Rogers, a Merck spokesman.
Bill Fredericks, a lawyer in New York who represents Merck shareholders, described the securities-fraud case as "very large" and likely to include "tens of thousands of investors and involve investing losses in the multiple billions."
Merck shareholders have seen several setbacks in recent years, including a settlement for Medicare overbilling and a study that said Merck cholesterol drug Vytorin was no more effective than a generic.
In the Supreme Court case, Merck argued that the two-year limit had already passed when the lawsuit was filed in November 2003. It contended that the two-year time period should have started with "inquiry notice," the point when the facts would have led "reasonably diligent" plaintiffs to investigate further. The court rejected that argument and said the clock started when investors had actual knowledge of a violation or a reasonably diligent investor could have known.