Merck hit by Vioxx litigation4th February 2008
US-based pharmaceutical giant Merck has reported a significant net loss in the fourth quarter of 2007 amid an industry-wide battle with governments and regulators over intellectual property rights and marketing practices, and litigation over its withdrawn painkiller, Vioxx.
Merck payed out US$4.85 billion to settle 50,000 claims from more than 27,000 lawsuits over Vioxx, which was taken off the market in 2004 after it was found to increase the risk of heart attack and stroke.
The company reported a US$3 billion net loss in the three months to end December 2007 after spending billions of dollars in litigation costs and related investigations.
The fourth-quarter figures also included a proposed settlement of US$671 million linked to state and federal investigations into its past sales and marketing practices, a common occurrence in the US pharmaceutical industry.
The company's share price fell by 3% in New York immediately after the announcement, which amounts to US 75 cents of loss per share.
Merck also faces weaker-than-expected sales increases in key products, and uncertainty over important cholesterol drugs sales this year.
Merck was among several top drug manufacturers raided by the European Commission earlier this month in a dispute over the release of patents to enable affordable, generic versions of drugs to be released onto markets as planned.
Meanwhile, the company's cholesterol drug Vytorin, sold in joint venture with Schering-Plough of the US, is the subject of Congressional inquiries into the delay of a study into the drug's effects. Merck said it faced about 50 class-action lawsuits over the marketing of Vytorin and Zetia, another cholesterol drug.
Dick Clark, chief executive said Merck was only halfway through its five-year turnround plan.
European regulators raided some of the world’s biggest pharmaceutical companies on Wednesday in an inquiry into whether they conspired to keep up the price of drugs after patents expired.
The European Commission is investigating whether the companies have abused patent rights in order to delay the introduction of low-cost generic alternatives, including making spurious attempts to extend the life of intellectual property rights or cut deals with one generic rival to the exclusion of others.
The novel and rather aggressive dawn raids come after increasing impatience among regulators with big pharma's resistance to affordable generic drugs.
The Commission said the raids were a starting point for a broader inquiry, and that there was no indication of wrongdoing by any of the companies targeted.
Pfizer, GSK, Teva, Sanofi-Aventis, AstraZeneca, Boehringer-Ingelheim and Merck all confirmed that they were contacted by Commission officials.
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Title: Merck hit by Vioxx litigation
Author: Luisetta Mudie
Article Id: 5505
Date Added: 4th Feb 2008