Merck has agreed to pay $950 million and has pleaded guilty to a criminal charge over the marketing and sales of the painkiller Vioxx, the company and the Justice Department said Tuesday.
The negotiated settlement, which includes resolution of civil cases, was the latest of a series of fraud cases brought by federal and state prosecutors against major pharmaceutical companies.
By the time Vioxx, which was approved by the Food and Drug Administration in 1999, was pulled off the market in 2004 because evidence showed that it posed a substantial heart risk, about 25 million Americans had taken the drug.
In a statement on Tuesday, Merck said that it had previously disclosed the seven-year investigation by the United States attorney in Massachusetts and had charged $950 million against its earnings in October 2010.
Merck agreed to pay a $321 million criminal fine and plead guilty to one misdemeanor count of illegally introducing a drug into interstate commerce, the Justice Department said in a news release. The charge arose from Merck’s promotion of Vioxx to treat rheumatoid arthritis before the Food and Drug Administration approved it for that purpose in 2002.
Merck also is paying $426 million to the federal government and $202 million to state Medicaid agencies. Those payments will settle civil claims that its illegal marketing caused doctors to prescribe and bill the government for Vioxx they otherwise would not have prescribed.
Physicians are free to prescribe drugs for any purpose they see fit, but pharmaceutical companies are prohibited from marketing them for any uses except those that the Food and Drug Administration has determined are safe and beneficial.
“When a pharmaceutical company ignores F.D.A. rules aimed at keeping our medicines safe and effective, that company undermines the ability of health care providers to make the best medical decisions on behalf of their patients,” Tony West, assistant attorney general of the Justice Department’s civil division, said in a statement.
Merck, based in Whitehouse Station, N.J., withdrew Vioxx from the market in more than 80 countries in 2004 after a clinical trial showed it doubled the risk of heart attack, stroke and death.
In 2007, Merck agreed to pay $4.85 billion to settle 27,000 lawsuits by people who had claimed they or their relatives had suffered injury or death after taking the drug. Merck has also signed a corporate integrity agreement in connection with the settlement, promising to monitor future promotional activity and report back regularly to the government. Merck joins Pfizer and most other major drug companies in settling long investigations with prosecutors.
No person was held liable for Merck’s conduct. “It’s just a cost of doing business until a pharmaceutical executive does a perp walk,” said Erik Gordon, a pharmaceutical analyst and clinical assistant professor at the Ross School of Business at the University of Michigan.
Investors are also suing Merck, saying it played down the risks of Vioxx and cost them billions of dollars in stock value after the drug was removed from the market.
Merck shares declined most of the day on Tuesday, dropping 0.97 percent to $33.81.
Article source: http://feeds.nytimes.com/click.phdo?i=c1a93e7f0373cfafb88f9efe4b147e2f
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