BrandweekNRX: Merck to Pay More than $650 Million Fine, Whistleblower gets $68 million.

February 07, 2008

Merck to Pay More than $650 Million Fine, Whistleblower gets $68 million.

Merck & Company has agreed to pay more than $650 million to resolve allegations that the pharmaceutical manufacturer failed to pay proper rebates to Medicaid and other government health care programs and paid illegal remuneration to health care providers to induce them to prescribe the company’s products, the Justice Department announced today. The allegations were brought in two separate lawsuits filed by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims Act.

H. Dean Steinke, a former Merck employee, alleged in his suit filed in Philadelphia that Merck violated the Medicaid Rebate Statute in connection with its marketing of its drugs Zocor and Vioxx. (Zocor is a cholesterol lowering drug and Vioxx, pulled from the market by Merck in September of 2004, was used for the treatment of acute pain and in the treatment of arthritis.) Merck allegedly offered deep discounts for the two drugs if hospitals used large quantities of those drugs in place of competitors’ brands.

Mr. Steinke will receive $44.6 million from the federal share of the settlement amount and an additional $23.5 million from the states.

Source: DOJ

Dr. Rost is a pharmaceuital litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower.

Posted on February 07, 2008 | Permalink

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Comments

The fines for illegalities perpetrated by the drug companies are minimal compared to the profit that the illegal activities generated. Drug companies consider these fines as "the cost of doing business."

One or two people were responsible for the misdead. Were those people criminally prosecuted, convicted, and made to serve some jail time, this would send a message of personal responsibility and would reduce the incidence of these acts.

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H. Dean Steinke, a former Merck employee, alleged in his suit filed in Philadelphia that Merck violated the Medicaid Rebate Statute in connection with its marketing of its drugs Zocor and Vioxx.

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