Merck & Co will pay $950m to settle civil claims and criminal charges relating to its promotion and marketing of Vioxx, an anti-inflammatory drug which was pulled from the market in 2004.
The long-running probe centred on Merck's promotion of Vioxx (rofecoxib) for rheumatoid arthritis without any approval of this indication by the FDA, even after it received a warning letter from the agency over the practice in 2001.
Merck said in October 2010 it was setting aside $950m to in anticipation of the settlement, having already paid $4.85bn to settle thousands of lawsuits alleging harm from the drug and almost $2bn in legal costs. All told, the company netted about $11bn in revenue from Vioxx in its five-year period on the market.
Under the terms of a plea agreement with the US Department of Justice, Merck will plead guilty to a misdemeanour offence for the illegal promotional activity and pay a $322m criminal fine.
The company will also settle the civil claims with a $628m payment to resolve not only the off-label marketing of Vioxx, but also allegations that it made false statements about the drug's cardiovascular safety.
The civil settlement does not constitute any admission by Merck of any liability or wrongdoing, the company said in a statement.
"As part of the plea agreement, the US acknowledged that there was no basis for a finding of high-level management participation in the violation," said Merck.
Merck is just the latest drugmaker to pay a hefty financial penalty for inappropriate marketing of medicines, and it remains under investigation for three other drugs, namely Temodar (temozolomide) for brain cancer and hepatitis C and cancer drugs PegIntron (pegylated interferon alfa-2b) and Intron A (interferon alfa-2b).
Earlier this month GlaxoSmithKline agreed to pay $3bn to settle investigations into its diabetes treatment Avandia (rosiglitazone), while in August Johnson & Johnson reached an agreement in principle to settle one misdemeanour charge brought by the Department of Justice related to its antipsychotic drug Risperdal (risperidone).
Several other cases remain under discussion and while a settlement figure has not been disclosed it is thought that prosecutors are seeking around $1bn from J&J.