Healthcare Business News

Merck to pay nearly $1 billion to resolve Vioxx allegations

By Jaimy Lee
Posted: November 22, 2011 - 3:00 pm ET

Merck has agreed to pay $950 million to resolve criminal charges and civil claims that the drug company illegally marketed Vioxx, the painkiller that was pulled from the market in 2004.

Merck, based in Whitehouse Station, N.J., will plead guilty to a misdemeanor for illegal promotion activity related to Vioxx and will pay a $321.6 million criminal fine, according to a Justice Department news release.

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The company will also enter a $628.4 million civil settlement agreement that resolves off-label marketing allegations and false statements that it made about the cardiovascular safety of Vioxx.

The criminal charge alleged Merck misbranded Vioxx by promoting the drug to physicians as a treatment for rheumatoid arthritis during a three-year period in which it was not approved by the Food and Drug Administration for that indication.

The criminal plea agreement charges Merck with misbranding Vioxx by promoting the drug as a treatment for rheumatoid arthritis during a three-year period in which it was not approved by the Food and Drug Administration to treat rheumatoid arthritis. Vioxx was approved by the FDA in 1999; it was approved as an indication for rheumatoid arthritis in 2002.

The civil settlement also recovers damages from false claims that were reported as a result of Merck's illegal promotion of Vioxx as a rheumatoid arthritis treatment.

“The parallel civil settlement covers a broader range of allegedly illegal conduct by Merck,” the Justice Department said in the release. “The settlement resolves allegations that Merck representatives made inaccurate, unsupported, or misleading statements about Vioxx's cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government.”

The U.S. will recover $426 million from the civil settlement and the remaining $202 million will be distributed to the Medicaid programs that participated in the suit.

Merck will enter into a corporate integrity agreement with the HHS' Office of the Inspector General. Top executives at Merck will be required to complete annual compliance certifications and Merck will be required to post information about physician payments on its website, according to the news release.

Merck said in a news release the “civil settlement does not constitute any admission by Merck of any liability or wrongdoing.” The civil settlement agreements are with the U.S. government, 43 states and the District of Columbia. The company said that litigation with the seven remaining states is outstanding.

“We believe that the settlement of this lengthy investigation is in the best interests of our stakeholders," said Bruce Kuhlik, Merck's executive vice president and general counsel, in a news release.

Merck said it recorded a $950 million charge in October 2010 in advance of the agreements.

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