Category Archives: 2008

It seems the Opinion-ators at the Wall Street Journal Agree. . . .

I suspect posts like mine are being echoed all over the blogosphere, tonight — that certainly seems to be the case, on the opinion pages of the Wall Street Journal — look here:

. . . .When Japan was mired in economic crisis, the U.S. urged it to take decisive action to deal with its ailing banks. Japan didn’t follow the advice and the crisis dragged on for years. Now, it is the U.S. that is mired in crisis and facing the prospect of swallowing the bitter medicine it once proffered. . . .

Indeed. It seems Floyd Norris, over at the New York Times Finance blog, agrees, as well:

. . . .[Lessons:]

1. The capital rules were far too lax, and they still are. They may have made sense if you assumed perfectly liquid and smoothly functioning markets, but that is like saying a roof does not leak when it is sunny and mild.

2. The end of the rules separating commercial banks from investment banks — Gramm Leach Bliley — is one reason the government is much more deeply involved now. Bank of America and J.P. Morgan Chase, the fire-sale buyers of Merrill and Bear, have government guaranteed deposits. That amounts to a subsidy, and when times get tough the subsidized firm has a big advantage over the unsubsidized one. To keep the others going, the Fed now will lend them money secured by almost anything they can find, including common stocks.

3. Those who were complaining, only months ago, that excessive regulation was making American markets uncompetitive, had it exactly wrong. It was a lack of regulation of the shadow financial system and its players that allowed this to happen. The regulators might not have gotten it right if they had tried to put limits on leverage, or assure that it was clear what risks were being taken, in the world of derivatives and securitizations. But deciding not to even try, and assuming that risks traded secretly would somehow end up in the hands of those most able to bear them, reflected ideology, not analysis. . . .

Now, I’ll be back firmly, and solidly, on topic.

August 1 is NEW deadline in ENHANCE-Related Schering Securities Class Action Litigation

The putative Schering Securities Class Action Litigation plaintiffs have been granted an order allowing them little more time to get their amended, consolidated complaint filed, due largely to taking longer than expected to finally resolve the interim leadership structure for the plaintiffs’ steering committee. The new deadline for filing the amended consolidated complaint is August 1, 2008. That means the Schering lawyers will have to wait all summer, effectively, to learn how independent experts view the advice they gave, and the disclosures they made. Or failed to make. Thus, it will be a long hot summer 2008. The case, In Re Schering-Plough Corporation/Enhance Litigation, originated as Manson v. Schering-Plough Corporation, et al. (Case No. 08-397, Complaint originally filed January 18, 2008, US Dist. Ct. NJ) before Judge Dennis M. Cavanaugh.

September 22 August 1 is NEW deadline in ENHANCE-Related Schering Securities Class Action Litigation

[Updated Agreed Scheduling Order, entered July 15, 2008.]

The putative Schering Securities Class Action Litigation plaintiffs have been granted an order allowing them little more time to get their amended, consolidated complaint filed, due largely to taking longer than expected to finally resolve the interim leadership structure for the plaintiffs’ steering committee. The new deadline for filing the amended consolidated complaint is August 1, 2008. That means the Schering lawyers will have to wait all summer, effectively, to learn how independent experts view the advice they gave, and the disclosures they made. Or failed to make. Thus, it will be a long hot summer 2008. The case, In Re Schering-Plough Corporation/Enhance Litigation, originated as Manson v. Schering-Plough Corporation, et al. (Case No. 08-397, Complaint originally filed January 18, 2008, US Dist. Ct. NJ) before Judge Dennis M. Cavanaugh.

Cobb, et al. v. Merck, et al. ERISA case reassigned to Judge Cavanaugh

Just a quick follow-up note, here — last night, Judge Garrett E. Brown, in Trenton, New Jersey, signed an order that reassigned to Judge Dennis M. Cavanaugh, the ERISA case captioned Cobb, et al. v. Merck & Co., Inc. et al., Case No. 3:08-cv-01974 (US Dist Ct NJ, Complaint filed April 21, 2008) — a putative class action advancing new theories of recovery, on behalf of the plaintiffs.

Judge Cavanaugh, of course, is the very-able federal district court judge, in Newark, New Jersey, who is handling almost all of the 125 plus would-be class action cases now pending against Schering-Plough, the joint venture, and Merck & Co., Inc., related to all the topics I cover on this blog. Merck made special mention of this case in its most recent SEC Form 10-Q (at the bottom of page 43). An interesting discussion of the legal principles involved appears in the comments to this post.

Covington and Burling’s DC Office is watching this one quite-closely.

That is all. Carry-on.

Cobb, et al. v. Merck, et al. ERISA case reassigned to Judge Cavanaugh

Just a quick follow-up note, here — last night, Judge Garrett E. Brown, in Trenton, New Jersey, signed an order that reassigned to Judge Dennis M. Cavanaugh, the ERISA case captioned Cobb, et al. v. Merck & Co., Inc. et al., Case No. 3:08-cv-01974 (US Dist Ct NJ, Complaint filed April 21, 2008) — a putative class action advancing new theories of recovery, on behalf of the plaintiffs.

Judge Cavanaugh, of course, is the very-able federal district court judge, in Newark, New Jersey, who is handling almost all of the 125 plus would-be class action cases now pending against Schering-Plough, the joint venture, and Merck & Co., Inc., related to all the topics I cover on this blog. Merck made special mention of this case in its most recent SEC Form 10-Q (at the bottom of page 43). An interesting discussion of the legal principles involved appears in the comments to this post.

Covington and Burling’s DC Office is watching this one quite-closely.

That is all. Carry-on.

Cobb, et al. v. Merck, et al. ERISA case reassigned to Judge Cavanaugh

Just a quick follow-up note, here — last night, Judge Garrett E. Brown, in Trenton, New Jersey, signed an order that reassigned to Judge Dennis M. Cavanaugh, the ERISA case captioned Cobb, et al. v. Merck & Co., Inc. et al., Case No. 3:08-cv-01974 (US Dist Ct NJ, Complaint filed April 21, 2008) — a putative class action advancing new theories of recovery, on behalf of the plaintiffs.

Judge Cavanaugh, of course, is the very-able federal district court judge, in Newark, New Jersey, who is handling almost all of the 125 plus would-be class action cases now pending against Schering-Plough, the joint venture, and Merck & Co., Inc., related to all the topics I cover on this blog. Merck made special mention of this case in its most recent SEC Form 10-Q (at the bottom of page 43). An interesting discussion of the legal principles involved appears in the comments to this post.

Covington and Burling’s DC Office is watching this one quite-closely.

That is all. Carry-on.

RICO Suit Filed against Schering-Plough.

First RICO Suit filed — seeking class action certification — 02.07.08

Well, it was only a matter of time. A rather comprehensive, RICO Act, 65 page complaint has been filed on behalf of the Iron Workers Health Fund of Eastern Michigan. The case citation:

IRON WORKERS HEALTH FUND OF EASTERN MICHIGAN, v. MERCK & CO., INC., SCHERING-PLOUGH CORPORATION, MERCK/SCHERING-PLOUGH PHARMACEUTICALS, and MSP SINGAPORE COMPANY LLC, No. 08-cv-695 (D.N.J., Complaint Filed February 7, 2008).

Here are the central RICO allegations:

. . . .Violation of § 1962(c) of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act 18 U.S.C. §§ 1961-1968

. . . .Section 1962(c) of the RICO Act makes it “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.”

. . . .Defendant Schering-Plough is a legal entity capable of holding a legal or beneficial interest in property and is a proper defendant “person” within the definition of the RICO Act, § 1961(4).

As described throughout this Complaint, both Defendant Merck and Defendant Schering-Plough beginning in April 2006 engaged in a pattern of fraudulent, racketeering activity through their joint ventures, Merck/Schering-Plough Pharmaceuticals (“MSP”) and MSP Singapore Company, LLC (“MSPSC”). . . .

[The complaint alleges they did so, by, among other devices:]

Before and throughout the Class Period, Defendants’ express, implied and unmistakable message relative to Vytorin and Zetia was that high cholesterol was bad for one’s health because it caused increased plaque formation, which in turn has been associated with an increased risk for heart disease, heart attack, and stroke.

The equally unmistakable corollary message in Defendants’ ads was that Vytorin, by combining Zetia and Zocor, was a superior medication to statins in the treatment of high cholesterol, increased plaque formation, and the associated risk for heart disease, heart attack, and stroke. In one advertisement, Defendants compared Vytorin to “regular” statins and claimed to be superior at reducing LDL cholesterol and the “[r]isk for heart disease, heart attack or stroke”. . . .

The results of the ENHANCE study shocked the medical community as it directly contradicted Defendants’ claim that by lowering LDL, Zetia also contributed to slowing or reducing the buildup of arterial plaque.

Moreover, there is no evidence of any kind to support a claim that Zetia contributes to slowing or reducing the buildup of arterial plaque. In an article dated November 21, 2007, the New York Times quoted Dr. Eric J. Topol, a cardiologist and director of the Scripps Translational Science Institute in La Jolla, California, as saying, “Statins have diverse effects beyond simple LDL cholesterol lowering, such as potent anti-inflammatory actions. There has yet to be a clinical trial to show that ezetimibe improves clinical outcomes.” . . .

RICO provides for trebling of damages — that is, damages may be TRIPLED, if a RICO pattern activity has occurred, and is proved at trial. This is very serious stuff — now, SGP and MRK will have their day in court — but this takes the dispute to a new level.

First there were consumer fraud claims, then securitites fraud claims, then FDA violations alleged. . . now, racketeering/criminal enterprise allegations.

Here’s an updated, but only partial, listing of the suits now pending, in federal courthouses, around the country — All as of February 7, 2008 — over 85 at SGP’s last published-count:

Rita Polk v. Schering-Plough Corp. and Merck & Co., Inc., No. 08-cv-285 (D.N.J.);

Jay Klitzner v. Schering-Plough Corp. and Merck & Co., Inc., No. 08-cv-316 (D.N.J.):

Sandra Weiss v. Schering-Plough Corp. and Merck & Co., Inc., No. 08-cv-320 (D.N.J.);

Lionel Galperin v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals, No. 08-cv-349 (D.N.J.);

Robert J. McGarry v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough

Pharmaceuticals, No. 08-cv-350 (D.N.J.);

Charles D. Maurer and Sidney Cooper v. Schering-Plough Corp. and Merck & Co., Inc., No. 08-cv-393 (D.N.J.);

Daniel A. Brown v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals, No. 08-cv-395 (D.N.J.);

Steven Knight v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough
Pharmaceuticals, No. 08-cv-396 (D.N.J.);

Michael P. Maina v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals, No. 08-cv-409 (D.N.J.);

Ken W. Bever v. Schering-Plough Corp. and Merck & Co., Inc., No. 08-cv-430 (D.N.J.);

David DeAngelis v. Schering-Plough Corp. and Merck & Co., Inc., No. 08-cv-431 (D.N.J.);

Ciro Verdi and Eileen Verdi v. Schering-Plough Corp. and Merck & Co., Inc., No. 08-cv-432 (D.N.J.);

Marilyn Woodman v. Schering-Plough Corp. and Merck & Co., Inc., No. 08-cv-437 (D.N.J.);

Scott Smoler v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough
Pharmaceuticals, No. 08-cv-482 (D.N.J.);

Danette Agovino, Richard Axenty, Bambi Chapman, Maia Erlikhman, Semen Erlikhman, Peter V. Grant, Roxanne Hitt, Donald Kerin, Gail Kerin, Charles Miller, Debbie Nielsen, Cheryl A. Olszewski, Jeffrey J. Panek, and Howard Weber v. Merck & Co., Inc., Schering-Plough Corp, and Merck/Schering-Plough Pharmaceuticals, No. 08-cv-500 (D.N.J.)

Marc Crawford, Florence DiBenedetto, Phyllis Reiff, Cynthia White and Gilbert L. White v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals, No. 08-cv-582 (D.N.J.);

Thomas E. Brandon, Jaret E. Brown, Paul J. Farinelli, Sr., Andrew Knall, Glenda Parker, Kurt W. Seestrom, Thomas J. Searls, Steven Weston, and Harold J. Versprille v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals, (D.N.J.);

Roseanne S. Flores v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-674 (E.D. La.);

Dennis Kean v. Merck & Co., Inc. and Schering-Plough Corp., No. 08-cv-061 (S.D. Ohio);

Panayiotis Balaouras v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals,, No. 08-cv-198 (N.D. Ohio);

Theodore Sahley v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-153 (N.D. Ohio);

Sigmond Tomaszewski v. Merck & Co., Inc., and Scherling[sic]-Plough Corp., No. 08-cv-258 (E.D.N.Y.);

Joyce B. Rheingold v. Merck & Co., Inc., Schering Corp. d/b/a Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals, No. 08-cv-438 (S.D.N.Y.);

Andrew Schwaeber v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering Plough Pharmaceuticals, No. 08-cv-344 (E.D.N.Y.);

Marion J. Greene v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-69 (M.D. Fla.);

Sam A. Ciotti v. Merck & Co., Inc., Scherling[sic]-Plough Corp., No. 08-cv-60077 (S.D. Fla.);

Ronna Dee Kitsmiller v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-120 (D. Colo.);

Jody Fischer v. Merck & Co., Inc., Schering-Corp. d/b/a Schering-Plough Corp., and
Merck/Schering-Plough Pharmaceuticals, No. 08-cv-203 (D. Minn.);

Daniel L. Tollefson, Sr. v. Merck & Co., Inc., Schering-Corp. d/b/a Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals, No. 08-cv-220 (D. Minn.);

Fred Singer v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-331 (E.D. Pa.);

John P. Dudley v. Merck & Co., Inc., Schering-Plough Corp., and MSP Singapore Co., LLC, No. 08-cv-1027 (D. Kan.);

Charles Swanson and Michael Jurich v. Merck & Co., Inc., Schering-Plough Inc. d/b/a
Schering Plough Pharmaceuticals, No. 08-cv-2040 (D. Kan.);

Alexis Alicea Figueroa, his spouse Carmen Ruiz Pagan, and the Conjugal Partnership formed by them, Miguel Robledo Gomez, his spouse Ileana Vega, and the Conjugal Partnership formed by them v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-1099 (D.P.R.);

Lisa Mims v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals, No. 08-10 (N.D. Miss.);

Susan McCulley v. Merck & Co., Inc., Schering-Plough Corp., and Merck/Schering-Plough Pharmaceuticals, No. 08-16 (N.D. Miss.);

George Artenstein v. Merck & Co., Inc., Schering-Plough Corp., Schering Corp., Schering Plough Healthcare Products, Inc., Schering-Plough Biopharma Corp., and Schering Plough Healthcare Products Sales Corp., No. 08-cv-152 (E.D. Cal.);

Helen Aronis v. Merck & Co., Inc., Schering-Plough Corp., Schering Corp., Schering Plough Healthcare Products, Inc., Schering-Plough Biopharma Corp., and Schering Plough Healthcare Products Sales Corp., No. 08-cv-152 (E.D. Cal.);

ASEA/AFSCME Local 52 Health Benefits Trust and Claudia Edwards v. Merck & Co., Inc.,

Schering-Plough Corp., and Merck/Schering Plough Pharmaceuticals, No. 08-cv-531 (N.D. Cal.);

Roberto DeLeon v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-34 (S.D. Tex.);

Robert S. Love v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-19 (E.D. Tex.);

John Carl Adams v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-69 D.N.M.);

Chong Badgley v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-123 (E.D. Mo.); and

Steve Dillon, John Weathers, and Ruth Weathers v. Merck & Co., Inc., and Schering-Plough Corp., No. 08-cv-4021 (W.D. Mo.).

The above complaint also alleges consumer fraud, and common law fraud counts, and does a great job of running down the scientific data that DOES NOT support Vytorin’s ad and web-claims — with lots of graphics, which will appear in a new post, here shortly.

This will be difficult to step around, as the gist of it is that one cannot market an FDA regulated, and licensed, drug substance without scientific evidence for the claimed benefits — and, to do so, repeatedly, would make out a RICO pattern, where, as here, billions were made when far cheaper substitutes would have done the same job.

Cheers!