The state and city of New York today filed a lawsuit against the drugmaker for allegedly hiding the heart risks associated with the painkiller. The lawsuit, filed in New York State Supreme Court, seeks damages, penalties and restitution for “tens of millions of taxpayer dollars wrongfully spent on Vioxx prescriptions,” New York State Attorney General Andrew Cuomo says in a statement.

The suit, which was joined by New York City Mayor Michael Bloomberg, claims that many Vioxx scrips never would have been written if docs were properly informed of the risk of heart attack or stroke. Six other states have filed similar complaints.

“Merck’s irresponsible and duplicitous conduct endangered the health of New Yorkers and wasted our tax dollars,” Cuomo says. “As alleged in the complaint, even as evidence was piling up showing just how dangerous this drug was, Merck put profits above all else and put thousands at risk by continuing to push Vioxx inappropriately on doctors and patients.”

Cuomo’s office adds this is the first case to be brought under New York’s recently-enacted False Claims Act, which allows the State to seek damages for the amount spent in Medicaid and EPIC healthcare programs to pay for drugs prescribed under false pretenses. The New York City Administrative Code has a similar law, the Attorney General’s office said.

Significantly, the lawsuit is filed just five months after Jim Sheehan, a former assistant US Attorney in Philadelphia who’s famous for prosecuting health care fraud, was appointed as New York State’s Medicaid Inspector General. Sheehan’s last big case in Philadelphia focused on Medco, the pharmacy benefits manager once owned by Merck. (That’s Sheehan in the picture to the right).

Between 1999 and 2004 Medicaid and EPIC spent over $100 million on Vioxx prescriptions in New York State, according to Cuomo’s office, referring to the New York State Medical Assistance Program and EPIC, or the Elderly Pharmaceutical Insurance Coverage plan.

Merck also faces 27,000 product liability lawsuits in federal and state courts over charges Vioxx caused heart attacks and strokes, as well as lawsuits from insurance companies and other third-party payors who claim they were overcharged for a faulty drug and are seeking reimbursement.

In a statement, Merck says: “We have not yet received the complaint but, as we previously disclosed, a handful of other states have previously sued for Medicaid reimbursement and we have been defending against those suits for some time.

“We believe that as a Company, we have acted responsibly, from researching the drug prior to approval, to monitoring the drug while it was on the market and to voluntarily withdrawing the drug when we did. Merck based its decisions on the data from well-controlled clinical trials and acted in the best interest of patients.

“The fact is that Vioxx worked for patients because it was effective at relieving pain with fewer GI effects than other drugs in its class. Additionally, heart attacks and the other alleged injuries in question were common before Vioxx was ever on the market and they remain common today. The medicine was appropriately labeled under the direction of the FDA according to the evolving science available at the time it was on the market.”