Merck and the U.S. Department of Justice (“DOJ”) announced yesterday that Merck will pay $950 million to resolve criminal charges and civil claims related to its promotion and marketing of the painkiller Vioxx. Merck joins a number of pharmaceutical makers, including GlaxoSmithKline, Pfizer and Eli Lilly, who have entered into settlements with the DOJ relating to their promotion and marketing of “off label” uses of their drugs.
Merck will plead guilty to a one-count misdemeanor information charging a single violation of the Food Drug and Cosmetic Act (“FDCA”) for illegally promoting Vioxx and will pay a $321,636,000 criminal fine. 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). 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 is also entering into a “civil settlements” agreement with the DOJ and 43 states under which it will pay $628,364,000. DOJ did not post the civil settlement documents, but presumably these are False Claims Act type settlements as these settlements resolve allegations that Merck (i) “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;” (ii) made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx that those agencies relied on in making payment decisions about the drug;” and (iii) also “recovers damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.”
Merck is also entering into a “civil settlements” agreement with the DOJ and 43 states under which it will pay $628,364,000. DOJ did not post the civil settlement documents, but presumably these are False Claims Act type settlements as these settlements resolve allegations that Merck (i) “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;” (ii) made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx that those agencies relied on in making payment decisions about the drug;” and (iii) also “recovers damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.”
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