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Last updated on April 25, 2014 at 1:22 EDT

Merck To Pay $950M To Settle Vioxx Dispute

November 23, 2011

Drugmaker Merck & Co will pay $950 million to settle criminal and civil charges that it marketed its Vioxx for an unapproved use, the U.S. Justice Department said on Tuesday.

The fine ends a long-running probe into Merck’s promotion of the painkilling drug, which was withdrawn from the market in September 2004 after being linked to increased risks of heart attacks and strokes.

The department said Merck would pay $321.6 million in criminal fines and $628.4 million as a civil settlement.

The case is one of the largest settlements by a major pharmaceutical company over marketing drugs in the U.S. for off-label uses.

Merck will also accept federal monitoring under the terms of the agreement.

Additionally, the company will plead guilty to a misdemeanor charge that it promoted Vioxx for treating rheumatoid arthritis before the U.S. Food and Drug Administration had approved the drug for that condition.

The Justice Department said the current settlement resolves charges that Merck made false, unproven, or misleading statements about Vioxx’s safety to increase sales, and made false statements to Medicaid agencies about its safety.

Merck said the settlement is not an admission of any liability or wrongdoing, and stressed that the government acknowledged there was no basis to conclude that Merck’s upper-level management was involved in the violations.

The company took a one-time charge of $950 million during the third quarter of 2010 to cover the expected settlement payments.

The FDA approved Vioxx in 1999, but not for use in treating rheumatoid arthritis.  That meant doctors could write prescriptions for Vioxx to treat rheumatoid arthritis patients, but Merck could not promote the drug for that use.

However, the Justice Department alleged that Merck had promoted Vioxx for rheumatoid arthritis for three years, and continued doing so after receiving an FDA warning letter in 2001.

The drug was ultimately approved as a treatment for rheumatoid arthritis in 2002.

The government will receive $426.4 million from the settlement, and $202 million will be distributed to Medicaid programs in 43 states and the District of Columbia.

In 2007, Merck paid $4.85 billion to settle some 50,000 Vioxx-related lawsuits over increased heart risks.

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Source: RedOrbit Staff & Wire Reports