Merck to Pay $950M in Vioxx Marketing Settlement

Seven years after its painkiller Vioxx was yanked off the market, Merck ($MRK) has agreed to pay $950 million to resolve allegations about its marketing. Merck will pay a $321 million criminal fine, $426 million to wrap up federal civil claims and $202 million to state Medicaid programs. And in an arrangement familiar to anyone who's been following the saga of off-label marketing allegations and False Claims Act lawsuits, a Merck unit will plead guilty to one misdemeanor violation of the Food, Drug and Cosmetic Act.
The settlement is among the 5 biggest in Big Pharma, surpassed by the new No. 1--GlaxoSmithKline's ($GSK) $3 billion deal covering the marketing of Avandia and 9 other drugs, plus pricing-fraud allegations--along with Pfizer's ($PFE) $2.3 billion Bextra settlement and Eli Lilly's ($LLY) $1.4 billion Zyprexa deal. One impending settlement could also top Merck's Vioxx deal: Abbott Laboratories ($ABT) is on the verge of settling a Department of Justice probe into its Depakote marketing, and it set aside $1.5 billion to cover those claims.

The feds have been knocking out off-label settlements like bowling pins over the last several years, with a who's who of pharma agreeing to pay criminal and civil fines. A senior FDA official said that any marketing activity that ignores the importance of FDA approval, or that makes unsupported safety claims about a drug is unacceptable, and will be pursued vigorously in both the criminal and civil arena.