A claim for restitution filed by Pennsylvania's attorney general caused a last-minute delay in the sentencing of Merck & Co. (MRK) for its violation of a federal drug law in connection with its marketing of former painkiller Vioxx.
At a hearing Friday in federal court in Boston, U.S. District Judge Patti Saris delayed Merck's sentencing until April 19 to allow for more time to consider the Pennsylvania claim. Merck was originally scheduled to be sentenced Friday.
Merck, of Whitehouse Station, N.J., agreed in November to pay $950 million and plead guilty to a misdemeanor charge of marketing a misbranded drug, to resolve government allegations that the company illegally promoted Vioxx and deceived the government about the drug's safety.
The government alleged Merck promoted Vioxx for treatment of rheumatoid arthritis before that use was approved by regulators. A portion of the $950 million settlement also was to resolve parallel civil allegations that Merck made false and misleading statements about Vioxx's safety, causing government health programs to pay for the drug's use. Merck denied the civil allegations.
Merck had withdrawn Vioxx from the market in 2004 after a study showed it increased the risk of heart attacks and other cardiovascular events.
The proposed November settlement was to resolve claims by the U.S. Justice Department, more than 40 states and the District of Columbia.
But last week, the Commonwealth of Pennsylvania filed a so-called victim impact statement with the court. Pennsylvania's attorney general office argued that Judge Saris shouldn't impose a sentence unless Pennsylvania obtains restitution for Medicaid payments allegedly resulting from Merck's criminal misconduct, according to a court document filed by the U.S. Justice Department.
Pennsylvania is continuing to pursue Vioxx-related claims against Merck in proceedings coordinated by a federal judge in Louisiana, according to the Justice Department.
The Justice Department argued that Pennsylvania therefore has a forum to pursue its claims, and it shouldn't hold up the sentencing in Boston.
Merck also urged Judge Saris to decline Pennsylvania's application for restitution because it would delay distribution of the settlement money to participating states.
In a written statement Friday, Merck said: "Through a last minute request the Commonwealth of Pennsylvania has attempted to derail an agreement already reached in good faith with the federal government, 44 other states, and the District of Columbia. There is no legal foundation for the Commonwealth's claim in this court and Merck will vigorously oppose it."
The Justice Department said Pennsylvania was allocated $4.5 million for alleged Medicaid losses under the $950 million settlement. States had the choice of either accepting their allocations or initiating or continuing litigation against Merck.
Friday, March 16, 2012
Sentencing Of Merck In Vioxx Case Delayed Over Pa Restitution Claim | Fox Business