Attorney General v. Merck Sharp & Dohme Corp.

807 N.W.2d 343, 292 Mich. App. 1
CourtMichigan Court of Appeals
DecidedMarch 17, 2011
DocketDocket No. 292003
StatusPublished
Cited by18 cases

This text of 807 N.W.2d 343 (Attorney General v. Merck Sharp & Dohme Corp.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Attorney General v. Merck Sharp & Dohme Corp., 807 N.W.2d 343, 292 Mich. App. 1 (Mich. Ct. App. 2011).

Opinions

SAAD, J.

Defendant, Merck Sharp & Dohme Corporation, appeals by leave granted the trial court’s order that denied its motion for summary disposition. For the reasons set forth below, we reverse and remand for further proceedings.

I. NATURE OF THE CASE

Michigan’s Attorney General claims that because Merck misrepresented the safety and efficacy of its prescription pain reliever Vioxx in its marketing and because Michigan reimbursed providers who prescribed or dispensed Vioxx, Michigan would not have incurred such expenses but for Merck’s fraudulent activity. The state now claims a right to recover these sums under the Medicaid False Claim Act (MFCA), MCL 400.601 et seq., but Merck counters that Michigan’s Legislature immunized it from liability in suits that seek to adjudicate a drug’s safety when the federal Food and Drug Administration (FDA) has approved the drug. The Attorney General maintains that the statute only exempts drugmakers in traditional products-liability actions in which an end user of the drug, i.e., a consumer, is injured by the ingestion of the drug. Merck argues that, regardless of the label that the Attorney General gives this lawsuit, the claims and ultimate right to recovery center on the safety and efficacy of a drug that the FDA has approved and the immunity statute, therefore, bars the claims.

Michigan’s immunity statute is the only one of its kind in the United States, and the claims made by the parties raise an issue of first impression under Michi[5]*5gan law. We hold that when, as here, the drug in question was approved by the FDA, the state’s suit to recover Medicaid money premised on fraud by the drug company in its representations regarding the safety and efficacy of the drug is barred by MCL 600.2946(5), which exempts drug companies from prodücts-liability suits regarding FDA-approved drugs.1

II. FACTS AND PROCEEDINGS

Merck is the manufacturer of the prescription pain reliever Vioxx. In May 1999, the FDA approved Vioxx for the treatment of osteoarthritis, the management of acute pain in adults, and the treatment of primary dysmenorrhea. Subsequent clinical trials and independent studies showed an increased risk of heart attack in persons who used Vioxx. In 2004, Merck voluntarily removed Vioxx from the market.2

On August 21, 2008, the Michigan Attorney General filed this action under the MFCA and alleged that Merck made false and deceptive statements about the safety and efficacy of Vioxx. Plaintiffs relied on § 7 of the MFCA, which provides, in pertinent part:

(1) A person shall not make or present or cause to be made or presented to an employee or officer of this state a claim under the social welfare act, 1939 PA 280, MCL 400.1 to 400.119b, upon or against the state, knowing the claim to be false.
[6]*6(2) A person shall not make or present or cause to be made or presented a claim under the social welfare act, 1939 PA 280, MCL 400.1 to 400.119b, that he or she knows falsely represents that the goods or services for which the claim is made were medically necessary in accordance with professionally accepted standards. [MCL 400.607(1) and (2).]

Vioxx had been prescribed to Medicaid beneficiaries from 1999 until 2004, when it was taken off the market. Plaintiffs alleged that, as early as 2000, Merck knew that Vioxx was associated with an increased risk of heart attack and Merck concealed or misrepresented the scientific data from clinical trials that demonstrated this risk. Plaintiffs asserted that if Merck had been truthful about the safety and efficacy of Vioxx, they would not have paid all or part of the cost of Vioxx prescribed to Michigan Medicaid beneficiaries, which cost them more than $20 million. Plaintiffs also sought recovery under a theory of unjust enrichment.

Merck moved for summary disposition pursuant to MCR 2.116(C)(8) and argued that plaintiffs’ claims constitute a “product liability action” pursuant to MCL 600.2945(h)3 and are therefore barred by MCL 600.2946(5),4 which provides that a manufacturer or seller of a drug is not liable in a “product liability [7]*7action” if the drug was approved for safety and efficacy by the FDA and labeled in compliance with FDA standards. Merck relied on Duronio v Merck & Co, Inc, unpublished opinion per curiam of the Court of Appeals, issued June 13, 2006 (Docket No. 267003), in which this Court affirmed a trial court’s grant of summary disposition in favor of Merck in a similar case. In Duronio, the plaintiff asserted a fraud claim and a violation of the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq., on the basis of allegations that Merck misrepresented or concealed the risks associated with Vioxx.

[6]*6In a product liability action against a manufacturer or seller, a product that is a drug is not defective or unreasonably dangerous, and the manufacturer or seller is not liable, if the drug was approved for safety and efficacy by the United States food and drug administration, and the drug and its labeling were in compliance with the United States food and drug administration’s approval at the time the drug left the control of the manufacturer or seller.

[7]*7Here, the trial court denied Merck’s motion for summary disposition. The court disagreed in part with the Duronio panel’s interpretation of the phrase “products-liability action.” The court ruled that plaintiffs’ claims do not constitute a products-liability action because, unlike a products-liability action, plaintiffs’ claims under the MFCA and their theory of unjust enrichment do not require proof of a defective or unsafe product. The court also examined the legislative intent underlying MCL 600.2946(5) and concluded that the Legislature did not intend to foreclose actions under the MFCA.

III. ANALYSIS

Merck argues that this is a products-liability lawsuit, which is barred under MCL 600.2946(5). Merck maintains that the trial court erred by construing “product liability action” by considering legislative intent and public policy concerns instead of the plain language of MCL 600.2945(h) and this Court’s interpretation of it in Duronio. Merck argues that the statute defines “product liability action” broadly enough to encompass plaintiffs’ claims. Merck also contends that even if [8]*8public-policy implications are relevant, the trial court erred in its analysis. MCL 600.2946(5) does not bar all claims against pharmaceutical manufacturers in the hypothetical situations posed by the court. Claims involving ineffective drugs, or the ineffective performance of drugs, would be permitted as long as the safety of the drugs was not implicated. Merck also argues that allowing plaintiffs’ claims to proceed would subvert the legislative intent by leaving pharmaceutical manufacturers exposed to high-stakes litigation, while shielding them from smaller claims brought by individuals such as the Duronio plaintiff. Merck contends that the trial court improperly focused on the labels of plaintiffs’ claims, rather than their substance.

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Bluebook (online)
807 N.W.2d 343, 292 Mich. App. 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/attorney-general-v-merck-sharp-dohme-corp-michctapp-2011.