Merck (MRK) settled claims brought by the government in regards to its painkiller Vioxx today, agreeing to pay $950 million in criminal and civil penalties. Merck had actuallyset aside $950 million in 2010 to pay this fine, so it doesn’t exactly come as a shock to the market. Shares remained slightly down after the settlement was announced, and ended the day 1% lower.
The Department of Justice said in a release that Merck had misbranded Vioxx by promoting it for rheumatoid arthritis before the FDA had approved it for that purpose, the one charge referenced in the criminal settlement.
The government said the civil complaint covers a wider array of “allegedly illegal conduct.”
“The settlement resolves allegations that Merck representatives � made inaccurate, unsupported, or misleading statements about Vioxx�s cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government. � It also resolves allegations that Merck made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck�s false claims in making payment decisions about the drug. � Finally, like the criminal plea, the civil settlement also recovers damages for allegedly false claims caused by Merck�s unlawful promotion of Vioxx for rheumatoid arthritis.”
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