Merck & Co. will pay more than $650 million to resolve two whistle-blower lawsuits alleging the company illegally paid providers to use its products and gave hospitals volume discounts for Zocor, Vioxx and Pepcid while failing to extend the prices to Medicaid, the U.S. Justice Department announced.
Attorney General Michael Mukasey said in a written statement that the sumto be split among the federal government, participating states and the District of Columbiais among the largest the department ever received in a settlement.
Former Merck sales manager H. Dean Steinke is set to receive about $68.2 million from the $399 million payout from his lawsuit, which drew the aggressive participation of Nevadas Medicaid Fraud Control Unit in addition to the U.S. Justice Department. The other whistle-blower, New Orleans physician William LaCorte, will receive $24.1 million related to his allegations.
Merck, which admits no wrongdoing or liability in the agreement, disclosed in its fourth-quarter earnings report that it had reserved $670 million for the coming settlement, and a news release issued today says the company believes its pricing and sales and marketing policies and practices were consistent with all applicable regulations and contracts during the relevant time. (For a longer version of this item, click here.) -- by Gregg Blesch