Merck & Co to pay $950m Vioxx fine

 Merck & Co (trading in Europe as MSD) has agreed to pay almost a billion dollars to settle criminal and civil claims relating to its US promotion of the arthritis drug Vioxx.

The total of $950m covers all outstanding cases in the US relating to the drug’s off-label marketing and alleged false statements regarding its safety.

Ironically, Merck’s anti-inflammatory drug has perhaps inflamed more legal trouble than any drug in recent history.

Launched in 1999, Vioxx (rofecoxib) was used worldwide for treatment of rheumatoid arthritis. Merck withdrew it from the global market in 2004, responding to evidence that it increased the risk of blood clotting and other serious cardiovascular events.

However, as early as September 2001, the FDA had sent Merck a Warning Letter directing the company to cease publishing marketing materials which it judged to be “false, lacking in fair balance, or otherwise misleading”.

The criminal charges against Merck in the USA relate to its promotion of Vioxx as a treatment for rheumatoid arthritis for three years without FDA approval. The drug was finally approved by them in that indication in 2002.

The civil charges in the USA have taken the form of thousands of private lawsuits by patients or their relatives, claiming that Merck marketed the drug in an off-label indication and/or that it made false statements to Medicaid regarding the drug’s risks.

Class actions on behalf of thousands of patients have been launched in the UK and Australia.

Merck made approximately $11bn in global revenue from Vioxx, but stands to lose most of that. The company has already paid $4.85bn to settle individual lawsuits and almost $2bn in legal costs.

Under the terms of a plea agreement with the US Department of Justice, Merck will plead guilty to a single misdemeanour for its promotion of Vioxx in the US between 199 and 2002, paying a $322m fine.

The company will settle all US civil claims with a $628m payment that covers both the off-label marketing and the claims of misleading statements. Of this payment, two-thirds will be recovered by the US Government and the rest by Medicaid.

Merck & Co commented that the civil settlement did not constitute any admission of liability or wrongdoing at the corporate level: “As part of the plea agreement, the US acknowledged that there was no basis for a finding of high-level management participation in the violation.”

The case reflects the issues facing global pharma companies concerning potential breaches of regulations by executives at lower levels.

The most dramatic allegation regarding Vioxx has come from Australia, where a court heard in 2009 that doctors had received a bogus ‘clinical research journal’ containing pro-Vioxx articles credited to non-existent doctors and written by Merck’s marketing team.