Merck loses appeal in Texas Medicaid Vioxx fraud

Merck suffered another major setback yesterday as it gets ready for the second Vioxx trial scheduled to start in less than two weeks. The company has already been sued by thousands of consumers but it is also being sued many institutions that include state governments, investor groups, and other agencies. One of the first institutions to sue Merck was the State of Texas.

According to the lawsuit filed by the Texas Attorney General Greg Abbott, the company’s repeated failure to disclose the adverse effects of Vioxx, while offering it to the state’s Medicaid program as a safe painkiller, directly violated the Texas Medicaid Fraud Prevention Act. The Attorney General is requesting restitution to the state of Texas, plus interest, for all Medicaid payments made to the company for Vioxx prescriptions. The lawsuit also seeks civil penalties - all totalling to approximately $168 million.

Merck, however, did not want to deal with Texas AG in the state (particularly after Carol Ernst was awarded over a quarter billion dollars by a jury in Angleton) and had asked that the case be transferred to New Orleans where other federal cases are scheduled to be tried in November this year. This request was strongly opposed by Attorney General Abbott and in a decision by Judge Lee Yeakel in Austin his position has been sustained.

“I am pleased this judge concluded that Merck made a wrong move by trying to run from justice in a Texas state court. The judge simply said there are no federal questions at issue in the state’s lawsuit. We now look forward to a speedy trial and justice in this case,” Abbott said. The Texas Medicaid program reimbursed pharmacists $56 million for Vioxx prescriptions they filled for patients over a five-year period.

Recommended article: Merck loses almost all pre-trial motions in Humeston case