by Ben Vernia | April 19th, 2012
In November 2011, the pharmaceutical firm Merck agreed to a global resolution of allegations it promoted Vioxx unlawfully. The criminal component of that settlement included a guilty plea to a single misbranding misdemeanor charge under the Food, Drug and Cosmetic Act. On April 19, the Department of Justice announced that Judge Patty B. Saris of the District of Massachusetts had sentenced the company, as expected, to pay over $321 million. According to DOJ’s press release:
American pharmaceutical company Merck, Sharp & Dohme was sentenced by U.S. District Court Judge Patti B. Saris in Boston to pay a criminal fine in the amount of $321,636,000 in connection with its guilty plea related to its promotion and marketing of the painkiller Vioxx (rofecoxib), the Justice Department announced today. In December 2011, Merck pleaded guilty to violating the Food, Drug and Cosmetic Act (FDCA) for introducing a misbranded drug, Vioxx, into interstate commerce.
Merck’s guilty plea was part of a global resolution involving its illegal promotional activity. In November 2011, Merck entered into a civil settlement agreement under which it will pay $628,364,000 to resolve additional allegations regarding off-label marketing of Vioxx and false statements about the drug’s cardiovascular safety. Of the total civil settlement, $426,389,000 will be recovered by the United States, and the remaining share of $201,975,000 will be distributed to the participating Medicaid states. The settlement and today’s sentencing conclude a long-running investigation of Merck’s promotion of Vioxx, which was withdrawn from the marketplace in September 2004.
Merck’s criminal plea related to the misbranding of Vioxx by promoting the drug for treating rheumatoid arthritis, before that use was approved by the Food and Drug Administration (FDA). 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 for 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.
At today’s sentencing, Judge Saris said in substance that off label promotion has been a big problem, she has seen a barrage of off-label marketing cases, and that she hoped that the size of today’s settlement and the fact that the government continues to press these cases will send a signal to the industry that this is not acceptable conduct.
The parallel civil settlement covered a broader range of allegedly illegal conduct by Merck. The settlement resolved 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 resolved 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 recovered damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.