Merck To Pay $950 Million To Settle Vioxx® Off-Label Marketing Charges

American pharmaceutical company Merck, Sharp & Dohme (Merck) will pay $950 million to resolve criminal charges and civil claims related to its promotion and marketing of the painkiller Vioxx® (rofecoxib).   Merck previously withdrew Vioxx® from the market.

According to a November 23, 2011 joint announcement of the U.S. Departments of Justice (DOJ) and Health & Human Services (HHS), Merck has agreed to plead guilty to one misdemeanor count of engaging in illegal promotional activity and to a $321,636,000 criminal fine to resolve charges that its marketing of Vioxx® violated the Food Drug and Cosmetic Act (FDCA)

Concurrent with the criminal plea agreement, Merck also is entering into a civil settlement agreement under which it will pay $628,364,000 to resolve other allegations of off-label marketing of Vioxx® and false statements about the drug’s cardiovascular safety.   Of the total civil settlement, $426,389,000 will go to the United States, and the remaining share of $201,975,000 be paid to the participating Medicaid states.  The settlement and plea conclude a long-running investigation of Merck’s promotion of Vioxx®, which was withdrawn from the marketplace in September 2004.

Under the provisions of the FDCA, a company is required to specify the intended uses of a product in its new drug application to FDA.   Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – any use not specified in an application and approved by FDA – unless the company applies to the FDA for approval of the additional use.   The FDA approved Vioxx® for three indications in May 1999, but did not approve its use against rheumatoid arthritis until April 2002.   In the interim, for nearly three years, Merck promoted Vioxx® for rheumatoid arthritis, conduct for which it was admonished in an FDA warning letter issued in September 2001.

Merck’s criminal plea relates to misbranding of Vioxx® by promoting the drug for treating rheumatoid arthritis, before that use was approved by the Food and Drug Administration (FDA).  

The parallel civil settlement covers a broader range of allegedly illegal conduct by Merck.   The settlement resolves allegations that Merck representatives   made inaccurate, unsupported, or misleading statements about Vioxx’s cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government.   It also resolves allegations that Merck made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck’s false claims in making payment decisions about the drug.   Finally, like the criminal plea, the civil settlement also recovers damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.

As part of the settlement, Merck has also agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of HHS that requires it to strengthen the system of reviews and oversight procedures imposed on the company to deter and detect similar conduct in the future with respect to Merck products regulated by the FDA.

The Merck plea agreement and civil resolution agreement show the continuing commitment of DOJ and other federal regulators to investigate and prosecute off-label and other marketing of pharmaceutical products in violation of applicable federal laws.  Pharmaceutical companies and members of their workforce should heed the announcement as another reminder of the need to exercise continuing diligence to comply with these requirements.

For Help With Compliance, Investigations Or Other Needs

If you need assistance providing compliance or other training, reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer medical privacy and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns/ She also regularly designs and presents risk management, compliance and other training for health care providers, professional associations and others.   Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.  You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.

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THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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