A.G. Schneiderman Secures $61 Million Settlement With Pharmaceutical Giant Merck For Falsely Promoting The Safety Of Vioxx

Merck Misrepresented Heart Safety Of Dangerous Drug, Marketed Vioxx For Uses Not Approved By FDA

Schneiderman: Merck Will Be Held Accountable For Putting New Yorkers In Danger To Make A Profit


NEW YORK—Attorney General Eric T. Schneiderman today announced that he has secured a settlement with Merck Sharp & Dohme Corp., resolving civil and criminal charges that the pharmaceutical giant marketed its drug Vioxx for uses not approved by the United States Food and Drug Administration (FDA), and misrepresented the cardiovascular safety of the drug. As part of themultistate and federal agreement, Merck will pay a total of $615 million in civil damages and penalties to compensate Medicaid, Medicare and other governmental healthcare programs – over $61 million of which will be paid to New York State.

In 2004, Merck withdrew Vioxx from the market worldwide, citing an increase in the incidence of heart attacks and strokes in patients taking the drug, which incited the litigation by New York and other states.

“To make a profit, Merck put the lives of New Yorkers in danger by misrepresenting the safety of Vioxx,” said Attorney General Schneiderman. “The settlement holds this pharmaceutical giant accountable for its deceptive marketing practices and ripping off our state’s taxpayers. Our office will continue to root out this kind of reckless corporate behavior on behalf of the people of New York.”

The civil action filed by the Attorney General’s office, together with the New York City Corporation Counsel's office, charges that from May 1999 through September 2004, Merck made false or misleading representations about the cardiovascular safety of the prescription drug Vioxx, a non-steroidal anti-inflammatory medication, in its sale, marketing, advertising, and promotion of the drug. This misrepresentation caused physicians to write prescriptions for Vioxx that they otherwise would not have written, and thereby caused the Medicaid program to pay for prescriptions that should not have been reimbursed.

The criminal component of the resolution centers on the illegal marketing and promotion of Vioxx for the treatment of rheumatoid arthritis. Vioxx was introduced into the market in 1999 but was not approved by the FDA as a medication for rheumatoid arthritis until 2002. While it is not illegal for a physician to prescribe a drug for an unapproved use, federal law prohibits a manufacturer from promoting a drug for uses not approved by the FDA.

As a condition of the settlement, Merck will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing and sales practices.

The settlement was reached in November, but was not madepublic until the disposition of a related criminal matter.

A team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted settlement negotiations with Merck on behalf of the settling states. Team members included representatives from the Offices of the Attorneys General of Illinois, Massachusetts,and Ohio.

The matter was handled at the Attorney General's Office by Assistant Attorney General Randall Fox, who was formerly in the Office's Medicaid Fraud Control Unit and is now the Bureau Chief of the Office's Taxpayer Protection Bureau, and who was working under the supervision of Assistant Deputy Attorney General Paul Mahoney and Special Deputy Attorney General Monica Hickey-Martin. It was handled at the Corporation Counsel's Office by Senior Counsel John Low-Beer and Assistant Corporation Counsel Brian Horan in the Affirmative Litigation Bureau, working under the supervision of Gail Rubin, Chief of the Affirmative Litigation Bureau.

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