Merck resolves previously disclosed seven-year investigation

Merck (NYSE: MRK), known as MSD outside the United States and Canada, announced it has reached a resolution with federal and state authorities regarding a previously disclosed investigation concerning Vioxx. Merck voluntarily withdrew Vioxx from the market in September 2004. The company previously recorded a charge of $950 million in October 2010 in anticipation of today’s agreements.

Under civil settlement agreements signed with the United States and individually with 43 states and the District of Columbia, Merck will pay approximately two-thirds of the reserved charge to resolve civil allegations related to Vioxx. As a result, the United States and the participating states have released Merck from civil liability related to the governments’ allegations regarding the sale and marketing of Vioxx in the United States. Previously disclosed litigation with seven states remains outstanding.

The civil settlement does not constitute any admission by Merck of any liability or wrongdoing.

“We believe that Merck acted responsibly and in good faith in connection with the conduct at issue in these civil settlement agreements, including activities concerning the safety profile of Vioxx,” said Bruce N. Kuhlik, executive vice president and general counsel of Merck.

Separately, the company agreed to plead guilty to a misdemeanor under the Federal Food, Drug, and Cosmetic Act arising out of the marketing of Vioxx by company representatives to physicians in the United States for the treatment of rheumatoid arthritis before the FDA’s approval of that indication in April 2002. The company will pay a fine of approximately one-third of the reserved amount to the federal government as part of the plea agreement.

As part of the plea agreement, the United States acknowledged that there was no basis for a finding of high-level management participation in the violation. The government also recognized Merck’s full cooperation with its investigation.

Merck also has entered into a new corporate integrity agreement (CIA) with the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services. This agreement replaces Merck’s current CIA and builds upon the company’s existing comprehensive compliance program. Merck’s compliance program includes specific policies and procedures governing the company’s interactions with healthcare professionals and is designed to help prevent, detect and resolve potential violations of company policy or law.

“Merck recognizes the importance of robust compliance programs and is committed to adhering to the law and to our fundamental values and standards. We believe that the settlement of this lengthy investigation is in the best interests of our stakeholders, and we look forward to focusing on our mission to save and improve lives around the world,” said Kuhlik.