Pharmaceutical giant Merck will pay nearly $1 billion to resolve criminal and civil charges for wrongfully marketing its former hit painkiller Vioxx, the US Department of Justice said.
Merck agreed to plead guilty to breaking the Food, Drug, and Cosmetic Act after it promoted Vioxx for rheumatoid arthritis when the drug had not been approved for that disease, the department said in a statement.
The criminal fine amounts to $321.6 million.
It also agreed to pay $628.4 million to settle civil charges related to the marketing of Vioxx and making false statements about its safety.
Merck began marketing the drug, known by its generic name of ‘rofecoxib’, in 1999, promoting it not just for its approved use as a painkiller but also as a way to fight arthritis.
The Justice Department said Merck ignored warnings to stop and continued this policy until 2004 when Vioxx was pulled from the market after it was linked to a higher risk of heart attacks and stroke.
“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,” the Justice Department said.
“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.”
While the pharmaceutical giant agreed to the fines, the settlement made clear that the agreement “is neither an admission of facts or liability by Merck.”
“Merck expressly denies the contentions and allegations of the United States as set forth herein and denies that it engaged in any wrongful conduct,” with the exception of what it admitted specifically in the plea agreement, it said.
Merck has faced numerous lawsuits over the medicine from customers since withdrawing it from the market.
Back in 2007, it announced a $4.85 billion deal that would allow the US pharmaceutical giant to settle more than 95 per cent of lawsuits over Vioxx without any admission of liability on Merck’s part.
The move at the time marked a major reversal of course for the company, which had said it would fight more than 27,000 lawsuits.
Merck announced last month that it had tripled its net income to $1.7 billion, beating expectations thanks to big increases in sales of popular drugs and a favourable exchange rate.
Last year’s net income during the same period stood at $342 million. Earnings per share for the latest quarter reached $0.94, ahead of the $0.91 predicted by analysts. Global sales saw an eight per cent increase to $12 billion.
Merck has been seeking to achieve $3.5 billion in annual savings through its merger with Schering-Plough, one of several mega-mergers in the pharmaceuticals industry in recent years.
New Jersey-based Merck is independent from German pharmaceuticals maker Merck KGaA, though the two share the same historical roots.