Over 200 people who had heart attacks or strokes while taking the painkiller Vioxx have lost a legal aid appeal.
Merck is facing thousands of lawsuits related to Vioxx
The ruling will mean many will no longer be able to mount compensation claims in British courts.
The insurance needed to pursue a claim on a no-win, no-fee basis has also been denied, said solicitor Martyn Day who acts for the 200 claimants.
Some UK claimants are trying to sue in the US, but Mr Day said these could be thrown out by the manufacturer Merck.
Heart attacks and strokes
Merck withdrew Vioxx last year after a study it carried out said the drug could double the risk of heart attack or stroke.
Mr Day, of Leigh Day & Co Solicitors in London, said he was bitterly disappointed by the appeal ruling.
"This was as good a case as we have seen for a long, long time."
He said the claims were supported by "gold standard" scientific studies showing a significant risk of adverse effects compared with similar drugs.
"The fact that we have not been able to achieve any sort of funding package to allow these cases to go ahead spells the end of drug litigation in this country.
"Here is a very good case to test the system and the system is found terribly wanting."
He said the cost of mounting a compensation claim in instances such as this could be in the order of £10 - £15m.
He said this meant that legal aid authorities say they are unable to afford it and insurers are not prepared to take the risk.
"We were looking for a £5m cover, but even then the insurers were saying there is no way we can take on that sort of a risk," Mr Day explained.
"We are left trying to go to the US.
"I'm very worried there will be no recourse to justice for these people. They are very likely to be left in limbo land."
Merck said in a statement that it believed it had meritorious defences and intended to vigorously defend individual Vioxx cases one by one.
A spokeswoman said: "We believe we did the right thing every step of the way, including withdrawing Vioxx."
The firm is facing thousands of lawsuits from Vioxx users claiming its use led to heart attacks and strokes.
Earlier this month, Merck won a high-profile court case in New Jersey relating to Vioxx.
An Atlantic City jury found it gave doctors adequate warning about possible health risks and did not commit consumer fraud in marketing the drug.
Over 70 UK are set to see whether they might be able to bring their case in the US.
UK health law firm Alexander Harris have issued 24 cases in the US state of New Jersey and have a further 50 waiting.
Ann Alexander from the firm said: "We may not be able to pursue the claims to conclusion if we fail on what is known as the forum argument. This decides whether you are allowed to bring a case in a different country to your own. It will be a decision for the Judge as to whether non us residents will be allowed to pursue their claims in the US court.
"Our clients will not be prejudiced in any way by following this course of action and will still be able to pursue a claim in the UK, should we not succeed. We felt it was important to pursue this avenue first."