VioxxTPP Background
Plaintiffs' Allegations Concerning Merck's Misleading Marketing
Merck's Third-Party Payor Marketing Practices
VioxxTPP Background Information
In 2003, Seeger Weiss LLP filed the first third-party payor ("TPP") action in the United States against Merck & Co., Inc. ("Merck") on behalf of the International Union of Operating Engineers Local No. 68 Welfare Fund ("Local 68"). Local 68 is a New Jersey-based, Taft-Hartley trust fund that provides prescription drug coverage for its union members. When Local 68 plan participants filled prescriptions for VIOXX, the purchase was authorized and the drug was paid for by Local 68, in whole or in part. Local 68 and other TPPs seek reimbursement for VIOXX expenditures under New Jersey's Consumer Fraud Act ("CFA"). The CFA provides recovery for victims of deceptive marketing practices, such as misrepresentations or omissions made in connection with the promotion and sale of a product. The act provides for money damages, which are required by law to be tripled, and other relief-i.e., attorney's fees.
Typically, a TPP does not administer a prescription drug coverage plan itself. Rather it employs a Pharmacy Benefit Manager ("PBM") or health care provider to manage the benefits plan. Although the plan may be administered by a PBM, the cost of any prescription drugs purchased under the plan, whether in part or in full, is ultimately borne by the TPP. The list of drugs that the TPP will ultimately purchase for or reimburse its plan participants is called a "formulary." Whether a drug will be included on the formulary and the degree to which it will be paid for or reimbursed by the TPP, is usually determined by a Pharmacy and Therapeutics ("P&T") Committee-a group of healthcare professionals, including doctors and pharmacists, that are employees or consultants to the PBM or health care provider administering the plan. The factors considered by a P&T Committee when deciding whether to place a drug on the plan's formulary include: the safety, efficacy, and cost of the drug; the availability of other safe and effective therapies that are less expensive; and consumer and physician demand for the drug at issue.
Underlying TPP claims in the VIOXX litigation are Merck's aggressive marketing and promotion of VIOXX, while simultaneously misrepresenting and concealing critical safety information from TPPs and the physicians and pharmacists who advised them. Specifically, plaintiffs allege that Merck failed to disclose and/or sought to minimize the cardiovascular, mortality, and other safety risks associated with VIOXX in Merck's clinical trials of the drug. Further, Merck made exaggerated efficacy and gastrointestinal ("GI") safety claims concerning VIOXX. These misrepresentations and omissions, in combination with Merck's aggressive marketing campaign for VIOXX, were designed to increase physician and consumer demand for the drug, and thereby place pressure on TPPs to add VIOXX to their formularies.
Plaintiffs Allegations Concerning Merck's Misleading Promotion and Marketing of VIOXX
VIOXX was among a class of pain relievers called non-steroidal anti-inflammatory drugs ("NSAIDs"). Other pain relievers in this class include but are not limited to: aspirin, naproxen (such as Alleve®), ibuprofen (such as Advil® or Motrin®), and diclofenac (such as Voltaren®). NSAIDs relieve pain and inflammation by inhibiting production of an enzyme called prostaglandin G/H synthase. This enzyme consists of two similar forms, cyclooxygenase-1 ("COX-1") and cyclooxygenase-2 ("COX-2"). While COX-2 is generally associated with effects on pain and inflammation, COX-1 is associated, among other things, with effects on platelet aggregation and the integrity of the gastrointestinal ("GI") tract. Traditional NSAIDs inhibit both COX-1 and COX-2. Thus, while traditional NSAIDs may provide effective pain relief, they have also been associated with negative GI side effects.
When marketing VIOXX, Merck distinguished the drug from other NSAIDs as a selective COX-2 inhibitor. Because VIOXX targeted COX-2, but not COX-1, Merck claimed that VIOXX possessed the anti-inflammatory and analgesic properties of other NSAIDs without the potentially harmful gastrointestinal risks associated with them. In short, Merck marketed VIOXX as being equally (if not more) efficacious as non-selective NSAIDs, but safer. Omitted from Merck's marketing campaign, however, was acknowledgement that COX-2 is also a significant source of prostacyclin in patients with atherosclerosis. Prostacyclin is a vasodilator and a potent inhibitor of blood clots-an important defense mechanism to cardiovascular injury. See Elliot M. Antman, et al., Cyclooxygenase Inhibition and Cardiovascular Risk, CIRCULATION. 2005; 112: 759-770. Indeed, Merck failed to disclose this significant safety concern to the medical community, despite the fact that its own employees and outside consultants had warned it that inhibition of COX-2 might increase the incidence of cardiovascular events, such as heart attack and stroke, in patients taking VIOXX. See, e.g. MRK-AEI0002734 at 11-12.
For example, even prior to the drug being marketed, Merck was concerned that:
- VIOXX could increase the risk of cardiovascular events, such as heart attacks. See, e.g. MRK-NJ0315832.
- Concomitant use of VIOXX and a cardio-protective agent, such as aspirin, to deter cardiovascular events would eviscerate the purported GI safety benefits of the drug. See id.; and
- The label for VIOXX would need to include warning language that patients at risk for cardiovascular events should co-administer a cardio protective agent, such as aspirin, when taking VIOXX. See, e.g. MRK-ABC0000069 at ABC0000074.
Even after the drug was on the market and in the face of mounting evidence that VIOXX was dangerous, Merck sought to minimize the drug's safety risks. For example, in March 2000, Merck learned the results of a large-scale clinical trial comparing effects of VIOXX to a traditional NSAID, naproxen. This trial, called the VIGOR study, demonstrated an increased incidence of heart attack, among other deleterious effects, in those patients taking VIOXX. See, e.g., MRK-ABH0016219. When Merck published the study in November 2000, it misrepresented the incidence of heart attacks in the study and minimized the safety risks. Further, Merck attributed the increased incidence of heart attacks in the VIGOR study to a previously unseen and unproven "cardio-protective" effect of naproxen. See, Claire Bombardier, et al., Comparison of Upper Gastrointestinal Toxicity of Rofecoxib and Naproxen in Patients with Rheumatoid Arthritis, New England Journal of Medicine. 2000; 343: 1520, at 1526-27 . In the years that followed, Merck continued to distribute this misleading article to physicians as part of its promotional campaign for VIOXX. See, e.g., MRK-AJM0007467 at 3, 8. Indeed, in 2005, after the drug had been withdrawn from market, the New England Journal of Medicine published an Expression of Concern that cast serious doubt upon the integrity of Merck's cardiovascular safety claims in the 2000 VIGOR study article. See, Gregory D. Curfman, et al., Expression of Concern: Bombardier, et al., Comparison of Upper Gastrointestinal Toxicity of Rofecoxib and Naproxen in Patients with Rheumatoid Arthritis New England Journal of Medicine. 2000; 343:1520-8, 2005; 353: 26. Indeed, the journal concluded that Merck had presented a misleading safety profile of VIOXX to the medical community.
The New England Journal of Medicine was not alone in its criticism of Merck's safety disclosures related to VIOXX. Notably, in September 2001, the FDA sent a Warning Letter to Merck after the Company had issued a press release claiming a "favorable" cardiovascular safety profile for VIOXX and attributing the increased incidence of heart attacks in the VIGOR study to a cardio-protective effect of naproxen. Further, the Agency had identified specific instances where Merck had made identical claims to physicians through its paid lecturers and sales representatives. The FDA concluded that such marketing claims were "false and misleading." See, e.g., MRK-AAF0007777. Further, the FDA identified promotional materials that overstated the drug's efficacy.
While other clinical studies raised similar safety concerns, Merck never disclosed this data to the medical community. See, e.g., Excerpted Trial Testimony of Dr. Eric Topol at 125:7-130:1; 560:23-562:14 (Jan. 30, 2007). Further, clinical trials conducted in Alzheimer's patients from 1999 through 2003, demonstrated at least a three-fold increase in mortality in patients taking VIOXX, as compared to those taking placebo. See, e.g., MRK-AAX0000752 at 6-9. Again, this information was never disclosed to doctors, consumers, or the healthcare community. Thus, critical information that was necessary for health care professionals to evaluate the risk-benefit profile for VIOXX before prescribing it to patients was withheld or otherwise distorted by Merck.
Merck's Marketing Practices With Third-Party Payors
With respect to third-party payors, Plaintiffs contend that Merck's marketing campaign targeted TPPs on four fronts.
- First, Merck provided only summary information to TPPs and their representatives that omitted or minimized safety concerns. See, e.g., MRK-ABA0008821 at 8830-8833.
- Second, Merck sponsored and disseminated dubious economic analyses designed to convince TPPs of the economic benefits of VIOXX over competing, and less-expensive, NSAID therapies. By contrast, Merck internally acknowledged that the "economic benefits of VIOXX were only borderline." See, e.g., MRK-ABL0001217 at 1224 (excerpted document). As noted above, this purported economic benefit was premised on Merck's claim that because VIOXX was safer on the GI tract, the higher purchase price for the drug would be offset by the savings realized in avoidance of costly treatment for gastrointestinal complications often caused by other pain relievers. Such claims failed to take into account treatment costs associated with an increased incidence of cardiovascular injuries, as well as the purchase price of cardio-protective agents that Merck knew would be need to be taken concomitantly with VIOXX by a large number of patients.
- Third, Merck sought to directly influence the preferences and decision-making of individual doctors and pharmacists on P&T Committees responsible for making formulary decisions on behalf of TPPs. See, e.g., MRK-AFI0108254. Moreover, Merck's sales representatives were generally trained to deflect doctor's questions concerning the safety of the drug, see, e.g. MRK-AAR0010111 at 119, and were instructed not to discuss adverse safety data with physicians; see, e.g., MRK-AAR0007240.
- Fourth, Merck sought to exact pressure on TPPs to place VIOXX on their formularies by increasing patient and physician demand for the drug. This was accomplished, in part, by a massive direct-to-consumer ("DTC") advertising campaign. See, e.g., MRK-ABI0004780 at 9.
Whenever a member of the medical community raised safety concerns about VIOXX, Merck moved swiftly to discredit such physicians or otherwise minimize the impact of their allegations. See, e.g., MRK-AAR0021110; MRK-ABI0003228. Significantly, shortly after the drug was first marketed, Merck had identified several physicians whom it sought to "neutralize" or "discredit" because they held unfavorable views of Merck or VIOXX. See, e.g., MRK-AFI0201416. Indeed, by January 2001, Merck received a letter from a Stanford Medical School professor complaining of a threats and intimidation tactics targeted at several academics and physicians who had questioned the safety of VIOXX and criticized Merck's disclosure of clinical trial data. See, e.g., MRK-ABO0000250. Plaintiffs contend that such tactics further undermined the medical community's ability to properly evaluate the risks and benefits of VIOXX.
Merck's conduct caused Local 68 and other TPPs to add VIOXX to their formularies of approved NSAIDs-despite the eight-fold higher price of the drug-by deceiving them (as it deceived prescribing physicians and consumers) into believing that the premium price charged for VIOXX was justified on the grounds that the drug was just as effective but safer than other drugs of its class. As a result of Merck's misleading and deceptive promotion of the drug, TPPs paid billions of dollars for the cost of VIOXX prescriptions, when had the true safety profile of VIOXX been disclosed, TPPs would not have included VIOXX on their formularies. At a minimum, TPPs would have taken steps to reduce reimbursement amounts to patients for VIOXX purchases and/or would have discouraged physicians from prescribing the drug to their plan members in the first instance.
The consumer fraud claims at issue in the third-party payor litigation are nearly identical to such claims asserted by plaintiffs in the personal injury cases that have proceeded to trial in New Jersey. Notably, 4 out of 5 New Jersey juries (in Merck's backyard) hearing consumer fraud claims concerning VIOXX have found that Merck's marketing campaign for the drug misrepresented the safety of VIOXX, and, thus, that Merck committed consumer fraud on consumers and physicians.