Merck and Schering-Plough to pay $688 million in class action securities fraud litigation

After
nearly five years of litigation, a settlement was announced Thursday on behalf
of investors totaling $688 million in class actions against Merck & Co.
Inc., Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals.

These
two actions stem from claims that Merck and Schering, which merged in November
2009, artificially inflated their securities by concealing information and
making false and misleading statements about the anti-cholesterol drugs Zetia
and Vytorin, attorneys for the plaintiffs said in a statement. 

The
plaintiffs alleged that even though the defendants knew that a clinical trial
of Vytorin, called “ENHANCE,” demonstrated that Vytorin, a combination of Zetia
and a generic statin medication, was no more effective than the cheaper,
generic statin drug at reducing artery thickness, the companies championed the
“benefits” of the drugs, attracting billions of dollars of capital in the
process.

Yielding
to public pressure to release the results of the ENHANCE trial, the plaintiffs
alleged that the companies reluctantly announced that the cholesterol drugs
showed "no statistically significant difference" in plaque buildup,
and that news of these negative results and their related consequences caused
sharp declines in the value of the companies’ securities, resulting in
significant losses to investors.

The law firms Bernstein
Litowitz Berger & Grossmann and Grant & Eisenhofer represent the Merck
class. Bernstein Litowitz and Labaton Sucharow represent the Schering class.

Among
the plaintiffs are the Arkansas Teacher Retirement System, Public Employees'
Retirement System of Mississippi, Louisiana Municipal Police Employees'
Retirement System, Jacksonville Police and Fire Pension Fund, and General Retirement
System of the City of Detroit.