Merck to Pay $950M in Vioxx Settlement - Decided
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Merck to Pay $950M in Vioxx Settlement

The Department of Justice has announced that it reached a $950 million Vioxx settlement with Philadelphia-based drug manufacturer Merck. The total settlement includes a $321.6 million criminal fine and $628 million in civil damages. States participating in Medicaid will share in half of the monies.

The company already paid $4.85 billion to settle a number of related consumer product liability suits in 2007. As with those allegations, the Justice Department had accused Merck of making misleading statements about Vioxx’s cardiovascular safety, as well as illegally marketing the drug for off-label uses.

Though doctors can prescribe drugs for off-label purposes, drug companies are prohibited from advertising medications for any use not approved by the Food and Drug Administration. This is primarily for safety purposes, as the FDA has not vetted the effectiveness of the drug for those purposes.

For years before Merck yanked the anti-inflammatory painkiller from the shelves, it had marketed the drug as a treatment for rheumatoid arthritis. Such treatment was not approved until 2002. As part of the Vioxx settlement, Merck thus agreed to plead guilty to one misdemeanor count of introducing a misbranded drug into interstate commerce.

The Justice Department has been cracking down on similar behavior in the last five years, with the most recent settlement reaching an unprecedented $3 billion. Off-label marketing has become a widespread problem in the pharmaceutical industry. One study suggests that it involves executives, consultants, pharmacies, physicians, and a number of trade organizations and advocacy groups.

Such illegal marketing is not going to stop until drug companies feel the pain, and the kind of enforcement that lead to the Vioxx settlement is an important part of reaching that goal.

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