Merck to Pay $950 Million for Illegal Marketing of Vioxx

December 11, 2011 

U.S. Pharmaceutical Company Merck Sharp & Dohme to Pay Nearly One Billion Dollars Over Promotion of Vioxx®
On November 23rd, 2011, the Department of Justice announced that American pharmaceutical company Merck, Sharp & Dohme agreed to pay $950 million to resolve criminal charges and civil claims related to its promotion and marketing of the painkiller Vioxx® (rofecoxib).  Under the terms of the resolution, Merck plead guilty to a a violation of the Food Drug and Cosmetic Act (FDCA) for introducing a misbranded drug, Vioxx®, into interstate commerce.  Under the terms of its plea agreement with the United States, Merck will plead guilty to a misdemeanor for its illegal promotional activity and will pay a $321,636,000 criminal fine.

Merck is also entering into a civil settlement agreement under which it will pay $628,364,000 to resolve additional allegations regarding off-label marketing of Vioxx® and false statements about the drug’s cardiovascular safety.   Of the total civil settlement, $426,389,000 will be recovered by the United States, and the remaining share of $201,975,000 will be distributed to the participating Medicaid states.   The settlement and plea conclude a long-running investigation of Merck’s promotion of Vioxx®, which was withdrawn from the marketplace in September 2004.

Under the provisions of the FDCA, a company is required to specify the intended uses of a product in its new drug application to FDA.   Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – any use not specified in an application and approved by FDA – unless the company applies to the FDA for approval of the additional use.  Merck’s criminal plea relates to misbranding of Vioxx® by promoting the drug for treating rheumatoid arthritis, before that use was approved by the Food and Drug Administration (FDA).  The FDA approved Vioxx® for three indications in May 1999, but did not approve its use against rheumatoid arthritis until April 2002.   In the interim, for nearly three years, Merck promoted Vioxx® for rheumatoid arthritis, conduct for which it was admonished in an FDA warning letter issued in September 2001.

The parallel civil settlement covers a broader range of allegedly illegal conduct by Merck.   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.   It also resolves allegations that Merck made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck’s false claims in making payment decisions about the drug.   Finally, like the criminal plea, the civil settlement also recovers damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.

“We will continue to work with our law enforcement partners to aggressively investigate and prosecute pharmaceutical companies – no matter how large – when they improperly market their products,” said Daniel R. Levinson, Inspector General of the United States Department of Health and Human Services. “Merck’s comprehensive corporate integrity agreement requires top company officials to complete annual compliance certifications, and obligates Merck to post information about physician payments on its website.”

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