State to share in Vioxx accord

Merck to pay out $58 million over television ads

From staff and wire reports

May 21, 2008

Merck & Co. has agreed to pay $58 million to multiple states, including Maryland, to settle allegations that its ads for the once-popular painkiller Vioxx deceptively played down the health risks.

The agreement announced yesterday also calls for Merck to submit all new TV commercials for its drugs to the Food and Drug Administration for review before they can be aired.

"Consumers have a right to know about the side effects that their medications can cause," Maryland Attorney General Douglas F. Gansler said in a statement. "This judgment will help ensure that Merck provides that information."

Gansler filed a complaint in Baltimore Circuit Court yesterday alleging that Merck engaged in deceptive marketing that misrepresented Vioxx's cardiovascular risks. The settlement should resolve that complaint as well as end a three-year investigation by 29 states and the District of Columbia into Merck's advertising practices involving Vioxx. Maryland will receive $1.56 million under the settlement.

Merck is not admitting any wrongdoing under the settlement and defended its marketing of Vioxx in a statement yesterday.

"Today's agreement enables Merck to put this matter behind us and focus on what Merck does best, developing new medicines," said Bruce Kuhlik, Merck's executive vice president and general counsel.

Vioxx was taken off the market in 2004 after research showed it doubled the risk of heart attacks and strokes.

That triggered thousands of lawsuits against Whitehouse Station, N.J.-based Merck. A pending $4.85 billion settlement would end the bulk of those personal injury suits.

Thanks to aggressive marketing through direct-to-consumer television ads begun in 1999, hundreds of thousands of consumers demanded Vioxx prescriptions before doctors had a chance to understand the side effects, Pennsylvania Attorney General Tom Corbett said.

The FDA does not require drug companies to submit advertisements for advance approval except in cases where it has pursued enforcement actions over false and misleading claims, agency spokeswoman Rita Chappelle said.

The agreement calls for Merck to submit all new TV commercials for its drugs to the FDA for review and follow through with any changes the agency recommends before airing them for seven years. Additionally, for a 10-year period Merck must comply with any FDA recommendations to delay television advertising for newly approved pain medications.

Merck is also prohibited from "ghostwriting," a practice in which people who worked for the company or were otherwise connected to it allegedly wrote positive articles and studies about Vioxx, Corbett said.

Corbett's spokesman, Kevin Harley, said the settlement does not require approval by any court.

Most of the settlement cost will be covered by a $55 million pretax charge that Merck said it took in the first quarter.

In February, Merck agreed to pay $671 million to settle claims it overcharged the government for Vioxx and three other popular drugs and bribed doctors to prescribe its drugs. The announcement by federal prosecutors was one of the biggest U.S. health care fraud settlements ever.

In addition to Maryland and Pennsylvania, the states included in yesterday's settlement are Arkansas, Arizona, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington and Wisconsin.

Merck shares fell 28 cents to $39.74 yesterday.

Sun reporter Tricia Bishop and the Associated Press contributed to this article.