Merck Sharp & Dohme Pleads Guilty to Misbranding Vioxx®

BOSTON—Merck, Sharp, & Dohme pleaded guilty today to a misdemeanor violation of the Food, Drug and Cosmetic Act for introducing a misbranded drug into interstate commerce. The drug, the painkiller Vioxx® (rofecoxib), has been withdrawn from the market.

United States District Judge Patti B. Saris has set sentencing for Mar. 16, 2012, at 2:00 p.m., at which time she will determine whether to formally accept the plea. Under the terms of a plea agreement with the United States, Merck faces a $321 million dollar criminal fine.

At the plea hearing, the prosecutor detailed for the Court that, had the case gone to trial, the United States would have proven that Merck criminally misbranded Vioxx® by promoting the drug for use against rheumatoid arthritis, before that use was approved by the FDA. Under the provisions of the Food, Drug and Cosmetic Act, a company is required to specify the intended uses of a product in its new drug application to the FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses. The government would have established that, while Merck sought an additional indication for Vioxx® for use against rheumatoid arthritis, it did not secure FDA approval for this additional indication until April 2002. In the meanwhile, for nearly three years, Merck promoted Vioxx® for rheumatoid arthritis, conduct for which it was admonished in an FDA Warning Letter issued in September 2001.

In conjunction with the criminal plea, Merck has also entered into a civil settlement agreement under which it will pay $628 million to resolve additional allegations regarding off-label marketing of Vioxx® and false statements about the drug’s cardiovascular safety, as well as civil claims related to Merck’s illegal promotion of Vioxx for use against rheumatoid arthritis. The civil settlement and plea conclude a long-running investigation of Merck’s promotion of Vioxx®, which was withdrawn from the marketplace in September 2004. Merck has agreed to pay $628,364,000 to the United States, as well as state Medicaid agencies, to settle these civil claims. Of the total civil settlement, $426,389,000 will be recovered by the United States, and the remaining share of $201,975,000 will be distributed to the participating Medicaid states.

“Health care fraud and abuse is a tremendous drain on America’s healthcare resources. This plea serves as a clear reminder to pharmaceutical companies that illegal marketing will not be tolerated, and that the United States will continue to utilize all of the tools at its disposal to combat health care fraud,” said United States Attorney Carmen M. Ortiz.

The joint civil settlement and criminal resolution will recover nearly one billion dollars to federal and state health care programs, and is part of the government’s emphasis on combating health care fraud. The District of Massachusetts has recovered over $4 billion in civil and criminal penalties in the last two years alone, not including the recoveries in this case.

The announcement was made today by U.S. Attorney Ortiz; Tony West, Assistant Attorney General for the Civil Division of the Department of Justice; Susan J. Waddell, Special Agent in Charge of the Office of Inspector General for the Department of Health and Human Services; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation; Mark Dragonetti, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations; and Drew Grimm, Special Agent in Charge of the Office of the Inspector General for the Office of Personnel Management.

The case was handled by Assistant U.S. Attorneys Susan G. Winkler, Jeremy M. Sternberg and Zachary A. Cunha of the U.S. Attorney’s Office in the District of Massachusetts, together with Jill P. Furman, Assistant Director, and Trial Attorneys Lauren Bell and James Nelson of the Consumer Protection Branch of the Civil Division of the Department of Justice in Washington.