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Merck Agrees To $58M Settlement Over Vioxx Ad Claims

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HARRISBURG, Pa. — Merck & Co. has agreed to pay $58 million as part of a multistate settlement of allegations that its ads for the once-popular painkiller Vioxx deceptively played down the health risks.

The agreement announced Tuesday also calls for Merck to submit all new TV commercials for its drugs to the Food and Drug Administration for review before they can be aired.

Another provision of the settlement bars the company from "ghostwriting," a practice in which academic scientists were allegedly paid to take credit for positive research articles prepared by company-hired medical writers.

The civil settlement ends a joint three-year investigation by 29 states and the District of Columbia into Merck's advertising practices involving Vioxx, Pennsylvania Attorney General Tom Corbett said.

Vioxx was taken off the market in 2004 after research showed it doubled the risk of heart attacks and strokes. That triggered thousands of lawsuits against Whitehouse Station, N.J.-based Merck. A pending $4.85 billion settlement would end the bulk of those personal injury suits.

Thanks to aggressive marketing through direct-to-consumer television ads begun in 1999, hundreds of thousands of consumers demanded Vioxx prescriptions before doctors had a chance to understand the side effects, Corbett said.

"Consumers need clear information about the risks associated with prescription drugs so that they can make well-informed decisions about their health care," Corbett said.

The FDA does not require drug companies to submit advertisements for advance approval except in cases where it has pursued enforcement actions over false and misleading claims, agency spokeswoman Rita Chappelle said.

The agreement calls for Merck to submit all new TV commercials for its drugs to the FDA for review and follow through with any changes the agency recommends before airing them for seven years. Additionally, for a 10-year period Merck must comply with any FDA recommendations to delay television advertising for newly approved pain medications.

Two studies published in April in the Journal of the American Medical Association mentioned alleged ghostwriting by Merck and also contended that the company tried to minimize deaths in two studies that showed Vioxx didn't work at treating or preventing Alzheimer's disease.

Merck called the reports biased because five writers of the articles were paid consultants for people who sued Merck over Vioxx's heart and stroke risks, and a sixth testified about Merck and Vioxx's heart risks before a Senate panel.

Merck is not admitting any wrongdoing under the settlement and defended its marketing of Vioxx in a statement Tuesday.

"Today's agreement enables Merck to put this matter behind us and focus on what Merck does best, developing new medicines," said Bruce Kuhlik, Merck's executive vice president and general counsel.

Corbett's spokesman, Kevin Harley, said the settlement does not require approval by any court.

U.S. Reps. Bart Stupak. and John Dingell, both Michigan Democrats, wrote to executives of Merck and three other pharmaceutical companies on Tuesday, asking them to embrace business practices that would reduce misleading and deceptive ads.

"Consumers should not have to rely on the oversight function of Congress to make sure drug companies tell the truth in their ad campaigns," Stupak said.

Democrats in Congress have intensified their scrutiny of the drug industry, expressing support for tighter regulation of consumer-directed drug advertisements, among other things.

Last year, they tried unsuccessfully to pass a law that would ban such advertisements in the three years after a drug's approval. They are expected to make a similar push later this year.

Most of the settlement cost will be covered by a $55 million pretax charge that Merck said it took in the first quarter.

Pennsylvania officials could not immediately provide a breakdown of how the $58 million will be divided. Each state has discretion over how to use its share of the money, but it can pay for things such as attorneys' fees and other litigation costs, or be placed in consumer protection enforcement funds, for example, according to the agreement.

In February, Merck agreed to pay $671 million to settle claims it overcharged the government for Vioxx and three other popular drugs and bribed doctors to prescribe its drugs. The announcement by federal prosecutors was one of the biggest U.S. health care fraud settlements ever.

In addition to Pennsylvania, the states included in Tuesday's settlement are Arkansas, Arizona, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, Wisconsin.

Merck shares fell 28 cents to close Tuesday at $39.74.