Say what you will about Merck, the drug company responsible for putting the killer arthritis drug Vioxx on the market, but one thing is no longer debatable: Merck is a corporate criminal. Yesterday, the company pled guilty to a misdemeanor for its illegal promotional and marketing of Vioxx for rheumatoid arthritis and agreed to pay $950 million to resolve criminal charges and civil claims related to its promotion and marketing of the drug (off label marketing, false statements). That includes a $321,636,000 criminal fine. The money will go to both the federal government and a number of cash-strapped states that lost precious Medicaid funds due to Merck’s misconduct. And the company agreed to federal “ongoing monitoring of Merck’s conduct … to deter and detect similar conduct in the future.”
Merck, you may recall (and as recently described by NPR reporter Snigdha Prakash in Slate), sold Vioxx for about five and a half years,
knowing the drug doubled the risk of cardiovascular problems among users, but it did not tell doctors or patients. Instead, it pursued an active disinformation campaign—telling doctors that Vioxx was safer for the heart than older painkillers (it was not), squashing university scientists who dared to dissent, and withholding clinical trial results that would have definitively proven Vioxx’s risks to federal regulators. In late 2004, after the weight of the evidence became impossible to deny, Merck abruptly pulled Vioxx from the market.
According to the Justice Department,
The settlement resolves allegations that Merck representatives made inaccurate, unsupported, or misleading statements about Vioxx’s cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government. It also resolves allegations that Merck made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck’s false claims in making payment decisions about the drug. Finally, like the criminal plea, the civil settlement also recovers damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.…
“When a pharmaceutical company ignores FDA rules aimed at keeping our medicines safe and effective, that company undermines the ability of health care providers to make the best medical decisions on behalf of their patients,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.
So guess who Penn State has asked to conduct its own “full and complete” investigation into the Jerry Sandusky sexual abuse scandal? Merck's chairman and CEO Kenneth C. Frazier – the very guy widely credited with Merck’s scorched-earth legal strategy against dead and injured Vioxx victims. Prakash, whose book about Vioxx is called All the Justice Money Can Buy, wrote in Slate,
Frazier, then the company’s general counsel, declared Merck had done nothing wrong and refused to settle. “We’ll fight every case,” he declared, and hired top-flight law firms in several East Coast cities, in the South, in Chicago, and Los Angeles, as well as a prominent New York firm to coordinate the overall strategy. It took three years and $2 billion in legal expenses for Frazier’s hard-nosed tactics to pay off. Merck settled in late 2007 for a relative pittance, resolving some 50,000 Vioxx cases for just under $5 billion. It was a far cry from the $25 billion to $50 billion in liability that analysts had predicted when Merck withdrew the drug.…
At Merck, they were protecting a multibillion dollar drug. At Penn State, they were protecting a football program that brings in $70 million per year, confers prestige on the university and supports jobs with important titles and big paychecks.
Prakash summed it up this way: Kenneth C. Frazier “is a man with a track record of protecting powerful institutions from the consequences of their inaction. … Neither institution fulfilled its responsibilities, with devastating consequences for those on the outside."
And now, at least one of them is a criminal.