- From LexisNexis® Mealey’s™ Daily Legal News.
Merck, Sharp & Dohme has agreed to pay $ 8.25 million to settle a state court lawsuit by Pennsylvania alleging that the company violated consumer protection, Medicaid and drug benefit laws by failing to disclose the risks of the prescription pain drug Vioxx, according to a stipulated final judgment decree announced Feb. 22 by the state Attorney General’s Office (Commonwealth of Pennsylvania, et al., v. Merck, Sharpe & Dohme Corp., et al., No. n/a, Pa. Cmwlth.).
On Jan. 9, then-Attorney General Linda L. Kelly sued Merck in Commonwealth Court for violating the state’s Unfair Trade Practices and Consumer Protection Law, for fraudulent misrepresentation and/or suppression and for submitting false and fraudulent claims under the state Medicaid, Pharmaceutical Assistance Contract for the Elderly (PACE) and PACE Needs Enhancement Tier (PACE NET) programs.
PACE and PACE NET are state lottery-funded programs that help qualified seniors pay for prescription drugs.
The complaint alleges that Merck misrepresented and concealed material safety information from end-users, physicians and third-party payers such as the state’s health insurance programs concerning the cardiovascular and gastrointestinal risks of Vioxx.
Vioxx was an oral nonsteroidal anti-inflammatory drug (NSAID) that was prescribed primarily to treat arthritis pain. Merck voluntarily withdrew Vioxx in 2004 after clinical data showed an increased risk of heart attack and stroke associated with long-term use.
800 Percent Premium
The state complaint says that as a result of Merck’s wrongful conduct, the state programs paid about 800 percent more for Vioxx than they would have for equally efficacious NSAIDs such as naproxen. It says that a 30-day supply of Vioxx cost about $ 72 compared to $ 9 for a 30-day supply of traditional NSAIDs.
The decree calls for Merck to pay the Attorney General’s Office $ 8.25 million. Current Attorney General Kathleen G. Kane said that after deducting attorney fees and litigation costs, about $ 6.9 million of the settlement will be used to support PACE.
The decree also states that upon entry of judgment by the court, the state will stipulate to dismissal of its other Vioxx lawsuit pending in the Vioxx multidistrict litigation court in the U.S. District Court for the Eastern District of Louisiana, Commonwealth of Pennsylvania v. Merck & Co., Inc. (No. 2:09-cv-2861, E.D. Pa.).
Vytorin, Zetia Not Covered
The decree says the conduct covered by the agreement does not include the promotion and marketing of the Merck drugs Vytorin and/or Zetia and the publication of clinical trial, practices related to data safety monitoring boards or support for continuing medical education relating to Vytorin and Zetia. The two drugs are prescribed to lower cholesterol.
In a press release, Kane said “Merck had a clear legal obligation to disclose known harmful side effects from Vioxx to both the medical community and patients.”
In a Feb. 22 press release, Merck said it does not admit any liability or wrongdoing. “We believe that Merck acted responsibly and in good faith in connection with the matters at issue in this litigation, including activities concerning the safety profile of Vioxx,” said Bruce N. Kuhlik, executive vice president and general counsel.
“We believe the settlement of this lengthy litigation is in the best interests of our stakeholders and is consistent with our commitment to provide products and services that save and improve lives around the world.”
Other Merck Settlements
In February 2008, the Attorney General’s Office announced that the state would receive $ 8.5 million as its share of two national settlements between Merck, the federal government and 50 states for overcharges for Vioxx, Zocor and Pepcid. In May 2008, the Attorney General’s Office announced a $ 58 million settlement with Merck for alleged deceptive advertising of Vioxx.
After several federal and state court trials, Merck reached a $ 4.85 billion settlement of injury lawsuits.