(CN) – The Supreme Court said Tuesday that investors who lost millions on the painkiller Vioxx can continue with their class action against Merck & Co. over whether it provided enough information to the public about the drug’s risk before yanking it from the market.
The court sided with the 3rd Circuit to allow a 2003 class-action securities lawsuit claiming that Merck “defrauded investors by promoting the naproxen hypothesis, knowing the hypothesis was false.”
“This case concerns the timeliness of a complaint filed in a private securities fraud action,” Justice Stephen Breyer wrote for the unanimous court. “The complaint filed here was timely.”
The company tried to block the lawsuit as untimely, claiming that the two-year window to file had passed and that the clock began ticking when word first broke about the troubles with Vioxx in 2001. It claimed investors should have known from public information that the drug was problematic after the Food and Drug Administration issued warnings about Vioxx in September 2001.
Investors maintained that the two-year limit should not have started that soon.
A federal judge agreed with Merck in 2003 and tossed the lawsuit. The 3rd Circuit reversed, and the Supreme Court agreed.
Merck said it has already made a motion to dismiss the complaint on “numerous other grounds.”
“Merck is disappointed in today’s decision, but believes that the allegations in the complaint are unfounded and will continue to defend itself vigorously,” Bruce Kuhlik, Merck’s executive vice president and general counsel said in a statement.
The Whitehouse Station, N.J. company pulled Vioxx in 2004 after it was reported to double the risk of heart attack, stroke and death.