Payors claim they overpaid for Vioxx prescriptions.

On Thursday, the Supreme Court of New Jersey decertified "a nationwide class of third-party non-government payors" in a consumer fraud case against pharmaceutical maker Merck.  The payors alleged that Merck fraudulently induced them to overpay for prescriptions of the anti-inflammatory drug Vioxx.   Int’l Union of Operating Engineers Local No. 68 Welfare Fund v. Merck & Co., Inc., No. A-22 (N.J. Sept. 6, 2007) (per curiam).

The Court held:

  • The payors made their own decisions about whether, under what circumstances, and how much to pay for their beneficiaries’ Vioxx prescriptions.  Individual issues of reliance and loss thus predominated over common issues regarding Merck’s conduct.
  • The New Jersey Consumer Fraud Act doesn’t allow a "fraud on the market" presumption that all payors sustained loss as a result of Merck’s deceptive marketing campaign.  Such a presumption might have cured the predominance of individual issues problem.
  • The large size of payors’ average losses made individual treatment of the claims "superior" to class treatment.

The Court assumed, without deciding, that the New Jersey CFA could apply nationwide.

Blawgletter hasn’t followed the payors’ class action effort, but we suspect that the adage about taking care in choosing what to ask for may apply.  The payors, we imagine, won’t go quietly into that good night and will instead band together in a sprawling mass action or in multiple ones.  So we see litigation spreading over the horizon.

Hardball, baby!

Barry Barnett

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