Thursday, April 19, 2012

Merck Unit’s Plea Over Vioxx Investigation Accepted by Judge - Bloomberg

A unit of Merck & Co. (MRK), the second- largest U.S. drugmaker, pleaded guilty to a criminal misdemeanor charge as part of a $950 million settlement of a U.S. government probe of its illegal marketing of the painkiller Vioxx.

An official of Merck Sharp & Dohme said today that the company agreed to plead guilty to one count of misbranding Vioxx. U.S. District Judge Patti Saris in Boston accepted the plea as part of the drugmaker’s agreement to 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.

“I’m certainly going to accept this agreement because I think it’s in the public interest at this point,” Saris said. “I hope the size of this settlement and the fact that all these cases are being pressed by the federal and state governments -- the 44 state’s attorneys general -- will be a signal that this isn’t acceptable conduct,” she said from the bench.

Approved by the Food and Drug Administration in 1999, Vioxx 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 government recognized Merck’s full cooperation with its investigation and by putting this long-standing investigation to rest, we can more fully focus on discovering, developing and providing innovative medicines and vaccines that save and improve lives around the world,” Ron Rogers, a Merck spokesman, said today in an e-mailed statement about the plea.

Earlier Settlements

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 that resulted in today’s plea.

As part of the plea, the Merck unit acknowledged that the drugmaker sold Vioxx for rheumatoid arthritis when it wasn’t approved by the FDA for that use over an almost three-year period starting in May 1999. Regulators gave the drugmaker permission to sell Vioxx for that ailment in April 2002.

Prior to that approval, the company’s salespeople touted Vioxx to physicians for rheumatoid arthritis, prompting the FDA to send a warning letter on Sept. 17, 2001.

The letter said that Merck misled doctors by suggesting that “Vioxx is effective for the treatment of rheumatoid arthritis when this has not been demonstrated,” according to the criminal charge.

Grand Jury Investigation

Merck previously disclosed that federal prosecutors in Boston had identified the company in March 2009 as a target of a grand jury investigation. 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 criminal case is U.S. v. Merck, Sharp & Dohme Corp., 11-CR-10384-PBS, U.S. District Court, District of Massachusetts (Boston.)

To contact the reporters on this story: Jef Feeley in Wilmington, Delaware, at; Janelle Lawrence in Boston federal court at

To contact the editor responsible for this story: Michael Hytha at

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