Merck Settles Vioxx Case for $950 Million
Merck & Co. agreed to pay $950 million earlier this week to settle criminal and civil charges stemming from the Dow component's promotion of the painkiller Vioxx for unapproved uses. The settlement caps off a years-long probe into Merck's promotion of the drug, which was taken off the market in 2004 after researchers linked it to heart disease. The Justice Department accused Merck of promoting Vioxx as a treatment for rheumatoid arthritis, before the US Food and Drug Administration had approved it for that purpose.
The settlement is one of the largest ever by a major pharmaceutical company over off-label promotion, or marketing of a drug for uses other than those which have been approved by the FDA. Under the terms of the settlement, Merck pleaded guilty to a misdemeanor charge and will be levied a $321.6 million criminal fine for misbranding the drug. Also, to settle civil claims regarding Vioxx, Merck will pay $628.4 million for the off-label promotion and alleged false statement about the safety of the pill. The federal government will keep $426 million of the civil fine, with the remainder being shared between the states involved in the case.
Merck said that it was relieved to have the matter behind it, but said that the settlement did not mean the company admitted to any wrongdoing. "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," read a statement from Bruce Kuhlik, executive VP and general counsel for the company.
The financial effect of the settlement will be minimal, as Merck informed investors last October that it would be taking a $950 million charge due to the Vioxx probe, and set aside reserves to cover the fine. Back in 2007, Merck settled lawsuits filed by thousands of former Vioxx users, paying out a total of $4.85 billion to settle claims that the pill caused heart attacks.
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