Merck to Pay $950 Million to Settle Vioxx Probe

Merck (NYSE:MRK) has agreed to pay $950 million and plead guilty to a criminal misdemeanor to resolve a seven-year probe into whether the company illegally promoted its former painkiller Vioxx.

The settlement marks another step for Merck as it continues to sift through a mound of litigation against the company that emerged after the drug giant voluntarily removed the drug from the market in 2004.

The payout adds to $4.85 billion in Vioxx-related legal costs, many of which came from lawsuits claiming Vioxx caused injuries and deaths. While Merck reserved the $950 million settlement amount in 2010, the final agreement was just announced on Tuesday.

The payment by Merck resolves the civil allegations and releases Merck from civil liability related to the governments’ allegations regarding the sale and marketing of Vioxx in the U.S.

Merck says the 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 Kuhlik, Merck’s general counsel.

Separately, however, Merck 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 U.S. for the treatment of rheumatoid arthritis before the Food and Drug administration approved it in April 2002.

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

Merck said on Wednesday that it has entered into a new corporate integrity agreement with the U.S. Department of Health and Human Services to build upon its existing compliance program.