Merck agrees to pay $950 million in Vioxx safety probe

By Dr. Ananya Mandal, MDNov 22 2011

Merck & Co. will pay $950 million and one of its units will plead guilty to a criminal charge to resolve a U.S. probe of its illegal marketing of the painkiller Vioxx.

Merck Sharp & Dohme will plead guilty to one count of misbranding Vioxx, the company and U.S. prosecutors said today. The company will pay a $321.6 million criminal fine and $628.3 million to resolve civil claims that it sold Vioxx for unapproved uses and made false statements about its cardiovascular safety.

“Today’s resolution appropriately reflects the severity of Merck’s conduct and is yet another reminder that the government will not tolerate misconduct by drug companies that bend the rules and put patient safety at risk,” Carmen Ortiz, the U.S. attorney in Boston, said in a statement. Prosecutors in her office led the seven-year investigation into the company’s Vioxx marketing tactics.

Vioxx was first approved by the Food and Drug Administration in 1999 and it became Merck’s third largest-selling drug by 2003, generating $2.5 billion in annual sales. The company pulled Vioxx off the market in 2004 after a study found it posed an increased risk of heart attacks and strokes.

The company, based in Whitehouse Station, New Jersey, already paid $4.85 billion to settle thousands of patient lawsuits claiming injuries, and another $1.9 billion for legal costs. It set aside $950 million in October 2010 for the criminal settlement announced today.

“We believe that Merck acted responsibly and in good faith in connection with the conduct at issue in these civil settlement agreements, including activities concerning the safety profile of Vioxx,” Bruce N. Kuhlik, the company’s general counsel, said in a statement.

Merck Sharp & Dohme will plead guilty to violating the Food, Drug and Cosmetic Act by distributing a misbranded drug, the Justice Department said. The company will admit that between May 1999 and April 2002, it sold Vioxx for rheumatoid arthritis when it was not approved by the FDA for that use.

Merck got such an approval in April 2002. Since Vioxx was already being promoted for rheumatoid arthritis, the FDA sent a warning letter on Sept. 17, 2001. The letter said Merck made a misleading claim suggesting that “Vioxx is effective for the treatment of rheumatoid arthritis when this has not been demonstrated,” according to the criminal charge that Merck Sharp & Dohme will admit in federal court in Boston.

As part of the plea agreement, prosecutors acknowledged that “there was no basis for a finding of high-level management participation in the violation,” Merck said in a statement. Prosecutors began examining the company’s handling of internal research into Vioxx’s heart- attack and stroke risks and the company’s marketing tactics in selling the drug starting in 2004, the company said today.

The company won 11 of 16 Vioxx lawsuits at trial before agreeing in 2007 to create the $4.85 billion settlement fund. The accord called for the company to pay about $4 billion to resolve heart-attack claims and about $850 million to settle stroke suits, according to court filings.

The government will get $426.4 million from the settlement, and $202 million will be distributed to state Medicaid programs for 43 states and the District of Columbia. The case is one of the largest settlements by a major pharmaceutical company over marketing drugs in the United States for uses that have not been approved by the FDA, known as off-label promotion.

“We will not hesitate to pursue those who skirt the proper drug approval process and make misleading statements about the safety and efficacy of their products,” said Tony West, the Justice Department's assistant attorney general for the civil division, in a statement.