News that a seven-year federal probe of Merck‘s (NYSE:MRK) false marketing of its Vioxx drug spearheaded by the U.S. Attorney’s Office in Massachusetts is nearly at an end is eliciting a wide response by the media, particularly its $950 million settlement, as outlined by the U.S. Department of Justice’s statement.
As some have pointed out in the past, the Whitehouse Station, New Jersey pharmaceutical firm’s Vioxx litigation has been a gravy train for lawyers on both sides.
Launched on the market in 1999, Vioxx was part of a group of drugs referred to as cox-2 inhibitors, which also included Bextra and Celebrex, and were “hailed as a means of treating pain without causing gastrointestinal problems like bleeding, as can happen with related analgesics known as nonsteroidal, anti-inflammatory drugs,” according to the Doctors Lounge news channel.
Vioxx generated as much as $2.5 billion in sales per year and was marketed by Merck as a treatment for rheumatoid arthritis until it got a warning letter from the U.S. Food and Drug Administration in 2001
Merck withdrew Vioxx from the market in 2004. A year later, The New England Journal of Medicine alleged that the pharmaceutical company falsified its research for the drug.
In 2008, the company agreed to pay $58 million to settle claims by 29 states, including Pennsylvania , that the company’s TV ads for Vioxx were deceptive and allegedly downplayed any health risks of the drug. Under that accord, Merck officials have to submit all future TV ads to the FDA for review. Under the latest settlement terms, Merck agreed to establish a monitoring program to ensure compliance with federal laws and regulations in connection with the marketing of its drugs.
There were the inevitable comparisons with other substantial settlements like GlaxoSmithKline’s (NYSE:GSK) $3 billion settlement over Avandia and Pfizer’s (NYSE:PFE) $2.3 billion settlement to avoid criminal and civil allegations over its drug Bextra, Eli Lilly’s (NYSE:LLY) drug Zyprexa and Abbott’s (NYSE:ABT) Deprakote drug, illustrating a regulator’s heightened efforts against off-label violations.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
But as Doctor’s Lounge and Dechert partner James Beck’s Drug and Device Law blog point out, Merck has won a considerable number of Vioxx cases because of the challenge for plaintiffs to prove that their maladies were directly caused by the drug.
Merck asserts that by agreeing to the civil settlement it does not constitute an admission of liability or wrongdoing, according to a statement from Bruce N. Kuhlik, Merck’s general counsel.
