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Merck settles old marketing disputes

Merck & Co has moved to settle two long-running US investigations into past alleged sales and marketing malpractice, as well as a dispute over the "proper" calculation of Medicaid rebates, taking a $670m charge and entering a "corporate integrity agreement".

Merck & Co has moved to settle two long-running US investigations into past alleged sales and marketing malpractice, as well as a dispute over the "proper" calculation of Medicaid rebates, taking a $670m charge and entering a "corporate integrity agreement".

The company said that it was taking "a leadership position in restoring trust in this industry" and that "the settlements do not constitute an admission by Merck of any liability or wrongdoing".

The 'Philadelphia' and 'New Orleans' settlements, of $399m and $250m (plus interest on both), respectively, lays to rest investigations into past pricing programmes dating back to the mid-1990s. 'Philadelphia' pertains to Merck's actions (1998-2006) in offering hospitals "significantly discounted prices" on some of its key medications, including cholesterol-lowering drugs Zocor and Mevacor, and COX-2 inhibitor Vioxx. This investigation was also linked to "certain sales and marketing programs" for unspecified Merck products sold in the US until 2001.

The New Orleans settlement relates to price discounts offered to hospitals, between 1996 and 2001, for heartburn medicine Pepcid.

In drawing a line under the rolling inquiries, the company has also agreed to enter into a 'corporate integrity agreement' with the Office of Inspector General, which is part of the US Department of Health and Human Services. This intertwines with Merck's own compliance programme, which was in any case "substantially enhanced" in 2001 the firm says, governing its pharmaceutical sales and marketing activities in the US. The programme includes certain "policies and procedures" linked to Merck's interactions with healthcare professionals, and is designed to detect and resolve any violations of company policy or law.

Bruce Kuhlik, executive vice president, said that the firm was "dedicated to the highest standards of ethics and integrity" and that it would ensure that "our interactions with healthcare professionals support the care of patients and further the public health".

Merck & Co, whose alleged sales and marketing misdemeanours over the years have seen coverage in the UK press, shot to infamy in 2004 when it withdrew Vioxx from the global markets over links with an elevated cardiovascular risk in some patients.

7th February 2008

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