Attorney General Cuomo Subpoenasmerck And Schering-plough

NEW YORK, NY (January 26, 2008) ‑ Attorney General Andrew M. Cuomo announced the service of wide-ranging subpoenas on Merck & Co. (NYSE: MRK), Schering-Plough Corp. (NYSE: SGP), and Merck/Schering-Plough Pharmaceuticals seeking information about Vytorin, advertised as a highly-effective, cholesterol-lowering drug.  In a two-pronged investigation, Cuomo is seeking to determine whether the companies deliberately concealed the negative results of a research trial about the efficacy of Vytorin.  

The first prong of Cuomo’s investigation, brought under New York’s False Claims Act and consumer protection laws, focuses on the aggressive marketing of the drug to unsuspecting patients and doctors.  The second, brought under New York’s Martin Act, concerns the sale of the companies’ stocks to investors before the negative study results were disclosed.  

The subpoenas were issued days after the release of the results of a clinical trial called Enhance, which showed Vytorin, a brand-name drug, is no more effective than a cheaper generic at reducing plaque buildup in the arteries.  Merck & Co., Schering-Plough Corp. as well as Merck/Schering-Plough Pharmaceuticals, the partnership formed by the two companies to market Vytorin, did not publicly disclose the negative findings while widely advertising Vytorin as a highly-effective, cholesterol-lowering drug.
“We will investigate and, when appropriate, hold accountable drug companies for engaging in irresponsible and deceptive conduct and any deceitful marketing of prescription drugs,” said Attorney General Andrew Cuomo.  “Drug companies are on notice that concealing critical information about life-saving prescription drugs, profiting at the expense of patients’ health, and wasting taxpayer dollars, is simply unacceptable.”

Consumers and New York State’s Medicaid program paid millions more for Vytorin rather than buying a cheaper generic drug which the study appeared to show to be at least comparable to Vytorin.  Over the last two years, New York State’s Medicaid Program spent approximately $21 million on Vytorin.

The second prong of Cuomo’s investigation, brought under New York’s Martin Act, will probe whether certain insiders’ sales of stock were appropriate and whether the companies’ statements to investors were accurate.  In the days since the research results were disclosed, Schering-Plough’s stock has dropped thirty percent and Merck’s stock has dropped twenty percent.

The Attorney General’s subpoenas served on Merck & Co., Schering-Plough Corp. and Merck/Schering-Plough Pharmaceuticals seek, among other things:

  • All documents concerning the marketing and advertising of Vytorin.
  • All documents pertaining to the Enhance trial.
  • All communications between the company and its drug representatives concerning the marketing of Vytorin and the Enhance trial.
  • All documents concerning communications between the company’s drug representatives and physicians or any other medical personnel concerning Vytorin.
  • Additionally, the subpoenas seek:

  • All documents and information about the compensation of the companies’ officers and directors, including incentive-based compensation.
  • All communications with the companies’ investors, analysts, or the investing public where references to Vytorin or the Enhance trial were made.
  • All documents and information regarding disclosure or delay of disclosure of the results of the Enhance trial.
  • All documents and information about insiders’ sales of the companies’ stocks or the exercise of stock options.

Vytorin, developed by Merck & Co. and Schering-Plough Corp., is a single-tablet combination of Zetia and Merck's Zocor, which lost patent protection in 2006.

Last September, the Attorney General sued Merck & Co. for fraudulently concealing and misrepresenting the risk of the pain-killer Vioxx and causing tens of millions of taxpayer dollars to be unnecessarily spent by Medicaid.