American pharmaceutical company Merck, Sharp & Dohme has agreed to pay roughly 950 million U.S. dollars to resolve criminal charges and civil claims related to its promotion and marketing of the painkiller Vioxx, the U.S. Justice Department announced Tuesday.
Under the terms of its plea agreement with the U.S. government, Merck will plead guilty to a misdemeanor for its illegal promotional activity and will pay a 321.6-million-dollar criminal fine. It is also entering into a civil settlement agreement under which it will pay about 628.4 million dollars to resolve additional allegations regarding off-label marketing of Vioxx and false statements about the drug's cardiovascular safety.
It marks the latest big payout by a drug company to settle health-care fraud allegations. GlaxoSmithKline PLC recently reached an agreement in principle to pay 3 billion dollars to settle U.S. allegations of improper drug marketing. Pfizer Inc., Eli Lilly & Co. and AstraZeneca PLC also have reached costly settlements in recent years.
"As this plea agreement and civil settlement make clear, we will not hesitate to pursue those who skirt the proper drug approval process and make misleading statements about the safety and efficacy of their products," said Tony West, assistant attorney general for the Civil Division of the Department of Justice, in a statement.
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 U.S. Food Drug and Cosmetic Act, 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.
The FDA approved Vioxx for three indications in May 1999, but did not approve its use against rheumatoid arthritis until April 2002. In the interim, for nearly three years, Merck promoted Vioxx for rheumatoid arthritis, conduct for which it was admonished in an FDA warning letter issued in September 2001.
However, Merck said Tuesday the settlement does not mean it admits liability or wrongdoing.
"We believe that Merck acted responsibly and in good faith in connection with the conduct at issue in these civil settlement agreements, including activities concerning the safety profile of Vioxx," said Merck General Counsel Bruce Kuhlik in a statement.
