Merck will pay $950M to settle Vioxx investigation

NEW YORK - Drugmaker Merck & Co. Inc. will pay $950 million to resolve investigations into its marketing of the painkiller Vioxx, the Justice Department said Tuesday.

The agency said Merck, which has major operations in the Philadelphia region, would pay $321.6 million in criminal fines and $628.4 million as a civil settlement agreement.

It also will plead guilty to a misdemeanor charge that it marketed Vioxx as a treatment for rheumatoid arthritis before getting Food and Drug Administration approval.

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.

Merck stopped selling Vioxx in September 2004 after evidence showed the drug doubled the risk of heart attack and stroke.

In 2007, the company paid $4.85 billion to settle about 50,000 Vioxx-related lawsuits.

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

The Whitehouse Station, N.J., 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 May 1999, but the government did not initially approve the drug for use in cases of 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 September 2001. The drug was approved as a treatment for rheumatoid arthritis in April 2002.

Merck shares fell 33 cents, or less than 1 percent, to close at $33.81.