Michigan's unique statute confers immunity on drug makers even where fraud is alleged
Michigan's Attorney General sued Merck, Sharp & Dohme to recover the 20 million dollars that Michigan spent on Vioxx between 2000 and 2004. The AG argued that it should be allowed to recoup these expenses because Merck fraudulently secured Food and Drug Administration approval of the drug by concealing its dangerous character and the risk of heart attack and stroke it presented. The AG argued that if the state had known of these risks, it would not have approved payment of Vioxx for State Medicaid patients.Merck defended the case by reliance upon one of Michigan's tort "reform" statutes adopted when Republicans controlled both houses of the legislature and the governor's seat. The act in question grants complete immunity to drug makers sued for personal injury or property damage if the drug involved was approved by the FDA. The AG did not argue with the propriety of the law in general but claimed that it should be applied only to consumers who suffer injury. [How's that for a public policy?]
The Court of Appeals ruled that since the State suffered property damage by reason of paying Medicaid patients' medical billings for Vioxx, the State had suffered an injury for which immunity was granted to Merck by statute. The Court held that even though Merck has been forced to pay "billions" of dollars to other states and consumers because of its fraudulent concealment of safety risks, Michigan will remain the one state where it is immune from its own misconduct.