UPDATE: Merck, Schering-Plough Reach Deal Over Drug Marketing
July 15 2009 - 3:33PM
Dow Jones News
Merck & Co. (MRK) and Schering-Plough Corp. (SGP) agreed to
pay $5.4 million and comply with certain rules to settle a probe by
35 U.S. states and the District of Columbia into whether the drug
makers' handling of a negative study of their cholesterol drugs
violated consumer-protection laws.
The settlement doesn't require any other payments, or any
admission of misconduct or liability. Merck and Schering-Plough,
which jointly market the drugs and are in the process of merging,
did agree to non-monetary provisions in the settlement,
however.
The investigations arose from the so-called Enhance clinical
trial, whose results were released in January 2008 and showed that
Vytorin - a single-pill combination of Zetia and the drug
simvastatin - was no better than simvastatin alone at slowing
artery thickening. The results contributed to a 12% decline in
combined sales of Vytorin and Zetia last year, to $4.56
billion.
Merck and Schering-Plough came under criticism last year because
they waited nearly two years from the Enhance study's completion to
release the results. Critics suggested the companies delayed the
release because they knew they were negative, but the companies
said data-quality problems required repeated analyses, and that top
executives didn't know the outcome until shortly before public
release.
The controversy sparked various government investigations and
private litigation. Among them were attorneys general representing
the 35 states and D.C., who probed whether Merck and Schering
violated state consumer protection laws, primarily due to the long
delay in releasing results of the trial.
The settlement reflects "our belief that the companies conducted
the Enhance trial in good faith and that our promotion of Vytorin
and Zetia was in compliance with the law," Merck spokesman Ron
Rogers said.
Tony Green, spokesman for the Oregon Department of Justice,
which spearheaded the probe, said that if patients and their
doctors had been aware of the Enhance trial results sooner, "it's
entirely possible they would have behaved differently."
As government settlements go in the drug industry, the $5.4
million to be paid by Merck and Schering-Plough is pretty small -
Eli Lilly & Co. (LLY) agreed to pay $1.4 billion earlier this
year to settle government probes of its drug marketing.
But Merck and Schering aren't out of the woods yet with Enhance.
Wednesday's pact is only the first resolution of any
Enhance-related legal matters, but other Enhance legal matters
remain unresolved. Merck disclosed in September 2008 the U.S.
Justice Department's civil division is investigating whether the
companies' conduct related to Vytorin caused false claims to be
submitted to federal health programs. Historically, false-claims
investigations have led to larger settlements in the drug
industry.
Various private lawsuits alleging consumer-fraud violations,
personal injuries and securities-law violations also have been
filed against the companies.
In Wednesday's settlement, the companies agreed to continue to
comply with various federal laws requiring truthful marketing of
the products, Merck said.
According to Oregon's attorney general office, Merck agreed
to:
-Obtain pre-approval from the U.S. Food and Drug Administration
for all direct-to-consumer television advertisements;
-Comply with FDA suggestions to modify drug advertising;
-Register clinical trials and post their results;
-Prohibit so-called "ghost writing" of articles, which usually
refers to companies asking outside doctors or researchers to sign
their names to medical-journal studies prepared primarily with
company funding.
-Reduce conflicts of interest for data safety monitoring boards
that ensure the safety of participants in clinical trials; and,
-Comply with detailed rules prohibiting the deceptive use of
clinical trials.
Merck's Rogers said the company already complies with these
rules.
Merck shares rose 41 cents to $27.57. Schering was up 36 cents
at $25.28.
-By Peter Loftus, Dow Jones Newswires; 215-656-8289;
peter.loftus@dowjones.com
(John Kell contributed to this report.)