Merck to Pay Over $15 Million to Settle Georgia Medicaid Claims Against Vioxx

Attorney General Sam Olens announced that the State of Georgia, along with 42 other states and the federal government, has reached an agreement with Merck Sharp & Dohme Corporation (Merck) to settle civil and criminal allegations that Merck made false and misleading representations about its drug Vioxx. Specifically, the allegations claim that Merck marketed Vioxx for uses not approved by the United States Food and Drug Administration (FDA) and misrepresented the cardiovascular safety issues relating to the drug.

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. Georgia Medicaid will receive $15,648,300.46 in state and federal dollars, and the state portion of that amount is $6,822,077.81.

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.  Vioxx was introduced into the market in 1999 but was not approved by the FDA as an indication for rheumatoid arthritis until 2002. While it is not illegal for a physician to prescribe a drug for an unapproved use, federal law prohibits a manufacturer from promoting a drug for uses not approved by the FDA. The civil settlements are contingent upon the acceptance of Merck’s guilty plea by the U.S. District Court for the District of Massachusetts. A hearing date for this proceeding has not yet been scheduled.

Vioxx is a non-steroidal anti-inflammatory medication that was approved by the FDA in 1999 for the treatment of osteoarthritis, acute pain conditions and dysmenorrhea. On September 30, 2004, Merck voluntarily withdrew Vioxx from the market worldwide, citing an increase in the incidence of adverse cardiovascular events in patients taking Vioxx. An investigation initiated by the United States Attorney’s Office for the District of Massachusetts focused on allegations that Merck marketed Vioxx for the treatment of rheumatoid arthritis before the FDA approved the drug for that usage and that Merck promoted the cardiovascular safety of Vioxx by means of certain statements and writings that were inaccurate, misleading and inconsistent. These allegations form the basis of the civil and criminal resolutions being announced today. 

The State of Georgia alleges that Merck made false representations concerning the safety of Vioxx to its Medicaid program, and the Medicaid program relied on that information to its detriment in making formulary and prior authorization decisions with respect to the drug.

Georgia also alleges that Merck made false or misleading representations about Vioxx in its marketing, advertising and promotion of the drug that caused physicians to write prescriptions for Vioxx that they otherwise would not have written, and thereby caused the Medicaid program to pay for prescriptions that should not have been reimbursed.

As a condition of the settlement, Merck will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing and sales practices.

A team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted settlement negotiations with Merck on behalf of the settling states.