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For Immediate Release

Media Contact:
David Paulson, 410-576-6357
dpaulson@oag.state.md.us

Attorney General Gansler Settles Medicaid Fraud Claims Against Merck

Maryland to collect $1.6 million from $915 million settlement

BALTIMORE, MD ( Nov. 23, 2011) - Attorney General Douglas F. Gansler announced today that Maryland, along with 42 other states and the federal government, has reached agreement with Merck Sharp & Dohme Corp. (Merck) to settle civil and criminal allegations that Merck marketed its drug Vioxx for uses not approved by the United States Food and Drug Administration (FDA). Also, Merck misrepresented the cardiovascular safety issues relating to the drug and otherwise made false and misleading representations about Vioxx.

"Putting profits ahead of patient safety is never acceptable," said Attorney General Gansler. "Promoting any prescription drug for an unapproved use not only puts Marylanders at risk, it robs from the taxpayers and so, we're taking that money back."

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 healthcare programs for harm suffered as a result of this conduct. The Maryland Medicaid program will receive $1,596,570 from this settlement.

In addition, Merck has agreed to plead guilty to a violation of the Food, Drug, and Cosmetic Act, to pay a criminal fine and to forfeit more than $300 million. The criminal component of the settlement 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 announced today 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 (generic name rofecoxib) 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 number 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.

Maryland alleges that Merck falsely represented the safety of Vioxx to the Maryland Medicaid program. The Medicaid program relied on that information in making decisions about whether and how to list Vioxx on the Maryland Medicaid formulary, a list of drugs covered by the program that specifies any pre-authorization requirements for particular medications. Maryland 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. Team members included representatives from the Offices of the Attorneys General of Illinois, Massachusetts and Ohio.

In making the announcement, Attorney General Gansler would like to thank Assistant Attorney General Shelly Marie Martin for her work on this matter.


   

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