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Merck Pleads Guilty; Agrees to Pay $950 Million in Vioxx Settlement (MRK)

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Merck & CoMerck & Co. (NYSE: MRK), the Whitehouse Station, New Jersey-based global health care company, has pleased guilty to a criminal misdemeanor charge that it illegally promoted Vioxx and misled the government about the drug’s safety profile. Merck has agreed to pay $950 million to settle the probe, which lasted for seven years.

The settlement brings Merck closer to resolving the pile of lawsuits that followed the 2004 withdrawal of Vioxx, one of the company’s biggest selling drugs. Merck withdrew Vioxx from the market after a study demonstrated that the drug increased the risk for heart attacks and strokes.


The final agreement was announced by the U.S. Department of Justice. The Justice Department said that the healthcare company illegally promoted Vioxx for rheumatoid arthritis before the use was approved the U.S. FDA in 2002. Vioxx was initially approved by the FDA for treatment of certain types of pain.

Merck has pleased guilty to introducing a misbranded Vioxx to interstate commerce, a misdemeanor volation of the Food, Drug and Cosmetic Act.

The $950 million payout from Merck is the latest among a number of big payouts by pharma companies to settle health-care fraud charges. The probes highlight the fact that drug companies are facing increasing scrutiny from the government over the way they do their business.

The settlement increases Merck’s legal costs related to Vioxx. The company has already agreed to pay $4.85 billion to settle a number of lawsuits related to Vioxx.

Vioxx was one of Merck’s biggest selling drugs, recording sales of more than $11 billion in the five years it was on the market. However, since the drug has been taken off the market, the company has had to pay around $6 billion in settlements. If the legal-defense costs and possible payments from pending litigations are added then the amount would be even higher.

 

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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