NEW YORK (CNN/Money) - The Texas Attorney General sued Merck Thursday, accusing the drug company of misrepresenting the safety of arthritis painkiller Vioxx, the attorney general's office said.

Attorney General Greg Abbott said Merck & Co. (Research) "falsely touted the safety of the drug, knowing it caused a higher risk of heart attack and cardiovascular problems."

Abbott said in a statement that Merck "misrepresented its own studies and the concerns of physicians suggesting the drug may increase the risk of heart problems."

Hughes, Hubbard & Reed, the New York law firm representing Merck, said the company would "vigorously defend itself" against the attorney general's lawsuit.

"Merck acted responsibly, from researching Vioxx prior to approval in studies with almost 10,000 patients to monitoring the medicine while it was on the market to voluntarily withdrawing the medicine when it did," said Ted Meyer of Hughes, Hubbard & Reed in a statement.

Meyer said that Merck "promptly and extensively disclosed the data about Vioxx to the scientific and medical communities, and in the press."

The attorney general has demanded $168 million in damages because the Texas Medicaid program reimbursed pharmacists for Vioxx prescriptions.

Merck withdrew Vioxx, a $2.5 billion arthritis painkiller, from the market on Sept. 30, 2004, because of risks of heart attacks and strokes. The company now faces more than 2,000 lawsuits. Merck is due to face the first of the plaintiffs in a Texas court on July 11.

Merck, based in Whitehouse Station, N.J., had sales of about $23 billion last year.

For more stories about Fortune 500 companies, click here.