Merck ordered to pay $950M in Vioxx case

NEW YORK The U.S. Department of Justice said Tuesday that drug maker Merck will pay $950 million to resolve investigations into its marketing of the painkiller Vioxx.

The agency said Merck will pay $321.6 million in criminal fines and $628.4 million as a civil settlement agreement. It will also plead guilty to a misdemeanor charge that it marketed Vioxx as a treatment for rheumatoid arthritis before getting U.S. Food and Drug Administration approval.

Merck stopped selling Vioxx in 2004 after evidence showed the drug doubled the risk of heart attack and stroke. In 2007, the company paid $4.85 billion to settle around 50,000 Vioxx-related lawsuits.

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The Justice Department said the settlement resolves allegations that Merck made false, unproven, or misleading statements about Vioxx's safety to increase sales and made false statements to Medicaid agencies about its safety.

Merck said the settlement does not constitute an admission of any liability or wrongdoing, and it said the government acknowledged that there was no basis to conclude that Merck's upper-level management was involved in the violations. Merck will accept federal monitoring as part of the agreement.

The company took a charge of $950 million in the third quarter of 2010 to cover the anticipated settlement payments.

Vioxx was approved by the FDA in 1999, but the government did not initially approve the drug for use in rheumatoid arthritis. That meant doctors could write prescriptions for Vioxx for rheumatoid arthritis patients, but Merck could not promote the drug for that use. The Justice Department said Merck promoted Vioxx for rheumatoid arthritis for three years and continued to do so after getting an FDA warning letter in 2001. The drug was approved as a treatment for rheumatoid arthritis in 2002.

The government will get $426.4 million from the settlement, and $202 million will be distributed to state Medicaid programs for 43 states and the District of Columbia.