Merck Pays $950 Million To Settle Vioxx Charges

Pharmaceutical giant Merck & Co. has agreed to a massive $950 million settlement with the U.S. government and 43 states over the way it marketed the painkiller Vioxx.

The popular arthritis drug was withdrawn from the market in 2004 after it was linked to increased risk of heart attack and stroke among those who took it.

The U.S. Department of Justice said Merck will also plead guilty to misdemeanor charges that it marketed Vioxx as a treatment for arthritis before it gained approval to do so from the Food and Drug Administration (FDA). The criminal component of the agreement centers on the illegal marketing and promotion of Vioxx for the treatment of rheumatoid arthritis.

The FDA estimated in 2004 that Vioxx was responsible for more than 27,000 deaths.

Vioxx was introduced into the market in 1999 but was not approved by the FDA as an indication for rheumatoid arthritis until 2002. While it is not illegal for a physician to prescribe a drug for an unapproved use, federal law prohibits a manufacturer from promoting a drug for uses not approved by the FDA.

Vioxx pulled

On September 30, 2004, Merck voluntarily withdrew Vioxx from the market worldwide, citing an increase in the incidence of adverse cardiovascular events in patients taking Vioxx. An investigation followed which focused on allegations that Merck marketed Vioxx for the treatment of rheumatoid arthritis before the FDA approved the drug for that usage, and that Merck promoted the cardiovascular safety of Vioxx by means of certain statements and writings that were inaccurate, misleading and inconsistent. These allegations form the basis of the civil and criminal resolutions.

Merck faced thousands of personal injury lawsuits over Vioxx but initially defended each one individually before deciding, in 2007, to reach a class settlement of $4.85 billion. Last year the U.S. Supreme Court gave the green light to a securities fraud suit alleging that Merck made misleading statements about the safety of Vioxx, causing financial harm to the company's shareholders.

The states participating in the settlement say Merck made false and misleading statements to their Medicaid programs.

In agreeing to the settlement, Merck said it is not an admission of guilt and that there is no basis to conclude members of upper level management were involved in the violations.