Merck to pay $950 million for illegal marketing of Vioxx

@CNNMoney November 22, 2011: 5:19 PM ET

WASHINGTON (CNN) -- Pharmaceutical giant Merck (MRK, Fortune 500) will plead guilty for illegal promotional activity of the painkiller Vioxx, and pay fines and settlement costs totaling nearly $1 billion, the Justice Department announced Tuesday.

Justice officials said Merck, Sharp and Dohme has agreed to the massive settlement in order to resolve criminal charges and civil claims stemming from its promotion and marketing of Vioxx. The drug was withdrawn from the marketplace in September 2004.

Under the agreement, Merck will plead to a misdemeanor for the illegal promotion and pay a $321 million criminal fine.

The firm also agreed to a civil settlement under which it will pay $628 million to resolve allegations of off-label marketing and false statements about the cardiovascular safety of Vioxx.

Regarding the civil settlement, the federal government will receive $426 million and the remaining $202 million will be distributed to the participating Medicaid states, the Justice Department said.

"When a pharmaceutical company ignores FDA rules aimed at keeping our medicines safe and effective, that company undermines the ability of health care providers to make the best medical decisions on behalf of their patients," said Assistant Attorney General Tony West.

The FDA approved Vioxx for three medical purposes in 1999 but did not approve its use against rheumatoid arthritis until April 2002. The government says that in the interim for nearly three years, Merck promoted Vioxx for rheumatoid arthritis. An FDA warning letter was sent to Merck in 2001 for making the claims.

Officials say that while not a record settlement, the $950 million agreement places it among the top five settlements on record. To top of page

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