Hartford, CTA lawsuit has been filed against Merck alleging the company violated Employee Retirement Income Security Act (ERISA) laws in its managing of employee investments in Merck Plans. The lawsuit was filed June 20, 2008, in New Jersey.
According Nancy Kulesa, an associate with Schatz Nobel Izard PC, the complaint against Merck relates to its handling of employee investments and its marketing of Vytorin. Essentially, Merck and Schering-Plough marketed Vytorin, which is actually a combination of Zetia and Zocor, as being more effective at lowering cholesterol than taking Zocor alone. However, studies and articles published in the New England Journal of Medicine actually showed that Vytorin was no more effective than Zocor—which can also be purchased in a cheaper, generic form—taken alone.
When news broke that Vytorin was no more effective than less expensive medications, Merck's stock prices dropped considerably. Employees who invested in Merck's plans suffered significant losses in the price of the Merck Common Stock Fund.
"Basically, the shares had fallen 35 percent in 2008," Kulesa says. "The stock dropped about 15 percent on March 31 after the New England Journal of Medicine published the results of the study comparing Zocor and Vytorin to each other. The first drop was in January, when Merck issued a press release stating that the ENHANCE trial found that Vytorin lowered some cholesterol more than Zocor alone but it did not slow the growth of carotid artery plaque. It also fell incrementally during that time."
The lawsuit alleges that Merck breached its fiduciary duty by failing to make prudent investments for participants in its plans. Furthermore, the complaint alleges that the defendants failed to take action to protect the Plans from misrepresentations and omissions regarding the health and financial risks associated with Vytorin. Kulesa says that the goal is to recover some of what was lost as a result of the plan's fiduciaries breaching their duties when they knew or should have known that Merck Common Stock Fund was not a prudent investment because share prices were artificially inflated.
Four Merck plans are included in the lawsuit:
- Merck & Company Inc Employee Savings & Security Plan
- Merck & Company Inc Employee Stock Purchase & Savings Plan
- Merck Peruto Rico Employee Savings & Security Plan
- Merck MedCo Managed Care LLC 401(k) Savings Plan
The lawsuit was filed on behalf of participants in these plans between July 26, 2004 and March 31, 2008. All plan participants are included in the lawsuit and will be notified when a resolution to the lawsuit is reached. Participants do not need to contact the law firm to be included in the lawsuit; however, participants who have questions or concerns are welcome to contact the firm.
"We feel that this case has a lot of merit," Kulesa says. "We are enthusiastic that there will be a recovery to the class, either via settlement or judicial determination."
If you have suffered losses in this case, please send your complaint to a lawyer who will review your possible [Merck ERISA Lawsuit] at no cost or obligation.