Seven years after its painkiller Vioxx was yanked off the market, Merck ($MRK) has agreed to pay $950 million to resolve allegations about its marketing. The Department of Justice says Merck will pay a $321 million criminal fine, $426 million to wrap up federal civil claims and $202 million to state Medicaid programs. And in an arrangement familiar to anyone who's been following the saga of off-label marketing allegations and False Claims Act lawsuits, a Merck unit will plead guilty to one misdemeanor violation of the Food, Drug and Cosmetic Act.
The settlement is among the 5 biggest in Big Pharma, surpassed by the new No. 1--GlaxoSmithKline's ($GSK) $3 billion deal covering the marketing of Avandia and 9 other drugs, plus pricing-fraud allegations--along with Pfizer's ($PFE) $2.3 billion Bextra settlement and Eli Lilly's ($LLY) $1.4 billion Zyprexa deal. One impending settlement could also top Merck's Vioxx deal: Abbott Laboratories ($ABT) is on the verge of settling a Department of Justice probe into its Depakote marketing, and it set aside $1.5 billion to cover those claims.
The feds have been knocking out off-label settlements like bowling pins over the last several years, with a who's who of pharma agreeing to pay criminal and civil fines. "Today's resolution ... is yet another reminder that the United States will not tolerate misconduct by drug companies that bends the rules and puts patient safety at risk," U.S. Attorney Carmen Ortiz said in a statement. "Any marketing activity that ignores the importance of FDA approval, or that makes unsupported safety claims about a drug is unacceptable, and will be pursued vigorously in both the criminal and civil arena."
- see the DoJ release
- read Merck's reaction
- get more from The New York Times
- check out the Bloomberg coverage
$950M Vioxx charge weighs on Merck earnings
GSK settles U.S. investigation for $3B
Abbott's off-label deal said to be $800M civil, $500M criminal