Washington, along with 42 other states and the federal government, reached a nearly $1 billion settlement with drug maker Merck Sharp & Dohme Corp., the state attorney general said on Wednesday. The settlement with Merck was reached over civil and criminal allegations that Merck marketed the drug VIOXX for unapproved use.
Merck will pay the states and the federal government a total of $615 million in civil damages and penalties to compensate Medicaid, Medicare and other federal healthcare programs for harm suffered as a result of this conduct, said Rob McKenna, Washington State Attorney General. In addition, Merck has agreed to plead guilty to a violation of the Food, Drug, and Cosmetic Act and to pay a criminal fine and forfeiture of more than $300 million. The criminal component of the resolution centers on the illegal marketing and promotion of Vioxx for the treatment of rheumatoid arthritis, said McKenna. Vioxx was introduced into the market in 1999 as an anti-inflammatory medication for osteo-arthritis, but was not approved by the FDA as an indication for rheumatoid arthritis until 2002.
Payment amounts to states are based on how much was spent on the drug in each state during the time in question. In Washington State that will amount to $6.7 million, said McKenna. The AG's math shows that $1.2 million will be put toward the state's Medicaid program, and $2.3 million will be used for the general fund, said McKenna. The remainder will be given to the federal government to cover its Medicaid spending on Vioxx, McKenna added.
Merck's false statements led the state's Medicaid program to spend more on Vioxx than it would have otherwise, McKenna said, and doctors wrote prescriptions they otherwise would not have. While it is not illegal for a doctor to prescribe a drug for use not approved by the FDA, federal law prohibits manufacturers from promoting a drug for uses not approved by the FDA. Merck also claimed, using inaccurate, misleading and inconsistent statements, that the drug was safe for the heart, according to the government.
After it pulled Vioxx from the market, Merck was sued by shareholders, patients and survivors claiming Vioxx caused heart attacks and strokes, and from insurance plans seeking reimbursement for their costs for covering Vioxx prescriptions. Worldwide it's been reported that Vioxx may have been responsible for as many as 60 thousand deaths.
In response, Merck, the world's second-biggest drugmaker by sales, said the investors should have known from public information that there could be problems with the drug because the FDA had issued warnings to Merck about Vioxx risks late in September 2001.