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Merck agrees to $58M settlement over Vioxx ad claims
2008-05-20
Merck & Co. has agreed to pay $58 million as part of a multistate settlement of allegations that its ads for the once-popular painkiller Vioxx deceptively played down the health risks. The agreement announced Tuesday also calls for Merck to submit all new TV commercials for its drugs to the Food and Drug Administration for review. The civil settlement ends investigations by 29 states and the District of Columbia into Merck's advertising practices involving Vioxx, Pennsylvania Attorney General Tom Corbett said. Vioxx was taken off the market in 2004 after research showed it doubled the risk of heart attacks and strokes. That triggered thousands of lawsuits against Whitehouse Station, N.J.-based Merck. A pending $4.85 billion settlement would end the bulk of those personal injury suits. Thanks to aggressive marketing through direct-to-consumer television ads begun in 1999, hundreds of thousands of consumers demanded Vioxx prescriptions before doctors had a chance to understand the side effects, Corbett said. "Consumers need clear information about the risks associated with prescription drugs so that they can make well-informed decisions about their health care," Corbett said. An FDA spokeswoman did not immediately return a telephone message seeking comment Tuesday. The agreement calls for Merck to submit all new TV commercials for its drugs to the FDA for review and follow through with any changes the agency recommends before airing them for seven years. Additionally, for a 10-year period Merck must comply with any FDA recommendations to delay television advertising for newly approved pain medications. Merck is also prohibited from "ghostwriting," a practice in which people who worked for the company or were otherwise connected to it allegedly wrote positive articles and studies about Vioxx, Corbett said. Merck is not admitting any wrongdoing under the settlement and defended its marketing of Vioxx in a statement Tuesday. "Today's agreement enables Merck to put this matter behind us and focus on what Merck does best, developing new medicines," said Bruce Kuhlik, Merck's executive vice president and general counsel. Corbett's spokesman, Kevin Harley, said the settlement does not require approval by any court. Most of the settlement cost will be covered by a $55 million pretax charge that Merck said it took in the first quarter. Pennsylvania officials could not immediately provide a breakdown of how the $58 million will be divided. In February, Merck agreed to pay $671 million to settle claims it overcharged the government for Vioxx and three other popular drugs and bribed doctors to prescribe its drugs. The announcement by federal prosecutors was one of the biggest U.S. health care fraud settlements ever. In addition to Pennsylvania, the states included in Tuesday's settlement are Arkansas, Arizona, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, Wisconsin. Merck shares fell 12 cents to $39.90 in afternoon trading Tuesday.
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