Pharmaceutical Manufacturer Merck to Pay Nearly $10 Million to Massachusetts Medicaid Program
Part of National Settlement Negotiated by the USDOJ and AG Coakley’s Office to Resolve False Claims Allegations
BOSTON – Pharmaceutical manufacturer Merck Sharp & Dohme Corp. (Merck) has agreed to pay nearly $10 million to the Massachusetts Medicaid program as part of a nationwide settlement over allegations of off-label marketing and failure to disclose potential adverse health effects, Attorney General Martha Coakley announced today.
The settlement with the drug manufacturer resolves allegations that Merck marketed its drug Vioxx for uses not approved by the United States Food and Drug Administration (FDA), misrepresented the cardiovascular safety issues relating to the drug and otherwise made false and misleading representations about Vioxx.
“Today’s settlement reflects our office’s continuing commitment to hold pharmaceutical manufacturers accountable for improper sales and marketing practices,” said Attorney General Coakley. “Especially in cases where patient safety is at issue, we will continue to work with our partners in federal and state law enforcement to root out fraud and abuse and to safeguard the taxpayer dollars that fund essential medical services for our most vulnerable citizens.”
Under the terms of the settlement, Massachusetts will receive $9,769,473.64 as the state Medicaid program’s share of the national recovery. The Massachusetts Medicaid program (MassHealth) provides funds for health care products and services to eligible low-income individuals, including people with disabilities, children and elder citizens. In total, Merck will pay the states and the federal government a total of $615 million in civil damages and penalties to resolve claims on behalf of the Medicaid, Medicare and other federally-funded healthcare programs.
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 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 use, and that Merck promoted the cardiovascular safety of Vioxx by means of certain statements and writings that were inaccurate, misleading and inconsistent.
The settlement resolves allegations that Merck made false representations concerning the safety of Vioxx to the Massachusetts Medicaid program (MassHealth), and that MassHealth relied on that information to its detriment in making formulary and prior authorization decisions with respect to the drug. The settlement also resolves allegations that Merck made false or misleading representations about Vioxx in its marketing, advertising and promotion of the drug, and that those representations caused physicians to write prescriptions for Vioxx that they otherwise would not have written, thereby causing the Medicaid program to pay for prescriptions that should not have been submitted for reimbursement.
In addition to the civil settlements, Merck has agreed to plead guilty to a violation of the Food, Drug, and Cosmetic Act and to pay a criminal fine of $321 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 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.
In addition, as a condition of the national 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.
AG Coakley’s office led the multi-state settlement negotiating team, working in cooperation with the United States Attorney’s Office for the District of Massachusetts, the United States Department of Justice, the Office of Inspector General of the U.S. Department of Health and Human Services, and representatives of the Attorneys General offices of the states of Illinois and Ohio.
Assistant Attorney General Robert Patten of AG Coakley’s Medicaid Fraud Division served as lead negotiator for the state team in this national settlement. He was assisted by Data Analyst Anthony Megathlin, also of the Medicaid Fraud Division, and by an Assistant Attorney General from Illinois and a data analyst from the Ohio Attorney General’s Office.