Merck Pays $950 Million in Penalties and Fines

The Wall Street Journal recently reported that pharmaceutical giant Merck will enter a guilty plea to charges of illegally promoting Vioxx, a pain reliever and anti-inflammatory drug. The company will pay $950 million in fines and penalties to the US government and individual states. The case is yet another example of pharmaceutical companies gaming the system, hoping they will never be caught.

Improper Branding of Vioxx

Forbes reported on the settlement as well, noting Merck’s response that the civil area of the settlement does not include any admission of wrongdoing or liability on the company’s part.

Improper Branding of Vioxx

The plea was connected to Merck’s promotion of Vioxx for rheumatoid arthritis from 1999 to 2002. The settlement also covers Merck’s fraudulent statements to Medicaid regarding the cardiovascular safety of Vioxx. The plea agreement outlines payments of $321,636,000 in criminal fines for those illegal activities. Merck will pay $628,364,000 for improper marketing of the drug and the balance of $201,975,000 will go to the various Medicaid states affects by Merck’s improper actions.

The criminal portion of the plea involves improper branding of the prescription drug Vioxx. Merck promoted the drug for treating rheumatoid arthritis, although Vioxx had not been approved by the FDA for this indication. Drug companies must state all uses of a drug during when applying for FDA approval. If a drug is approved, it may not be promoted for any uses other than those listed during the application process. After approval, if other uses are discovered, the company may reapply to approve the additional uses. Vioxx was approved in May of 1999. In 2001, the FDA warned Merck about the illegal use, but the company continued marketing the drug for rheumatoid arthritis until 2002. Vioxx was removed from the market altogether when it was discovered that the drug could cause serious cardiac side effects.

The civil settlement, which runs parallel to the criminal settlement, covers a range of alleged illegal actions by Merck. Representatives of Merck made unsupported statements about the safety of Vioxx in order to hike sales of the drug. Merck representatives made these false claims to state Medicaid agencies to ensure the agencies would pay for patients to use the drug. State agencies relied on the statements made by Merck to make payment decisions concerning Vioxx.

Ignoring FDA Rules

When drug companies ignore the FDA rules put into place to keep medications safe, those companies undermine the abilities of healthcare professionals to make the best decisions for patients. The behavior also steals funds from medical programs. Patients seeking relief from arthritis pain could have received other safer, cheaper and just as effective medications but for Merck’s aggressive and dishonest marketing practices.

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