A week ago, another legal settlement with some noteworthy aspects came marching along. As reported by the Wall Street Journal, here are the details.
A Guilty Plea to "Misbranding"
First, there was a guilty plea (to a misdemeanor):
Merck & Co. agreed to pay $950 million and plead guilty to a criminal misdemeanor charge to resolve government allegations that the company illegally promoted its former painkiller Vioxx and deceived the government about the drug's safety.
The Justice Department said Merck illegally promoted Vioxx for rheumatoid arthritis before that use was approved by the Food and Drug Administration in 2002. The drug was initially approved in 1999 to treat certain types of pain. Drug companies are barred from promoting drugs for unauthorized, or 'off label,' uses, though doctors may prescribe off-label uses.
Merck agreed to plead guilty to introducing a 'misbranded' Vioxx into interstate commerce, which is a misdemeanor violation of the Food, Drug and Cosmetic Act, and to pay a $321.6 million criminal fine.
So the company actually admitted to violating the law in the form of a misdemeanor, selling a drug for unapproved uses. The importance of this sort of activity has been frequently challenged, especially by those who claim that corporations have free speech rights that allow them to promote practically anything they want.
However, this was not the only issue apparently resolved.
A Civil Settlement
The company agreed to pay $628.4 million to settle civil allegations.
What were these allegations?
The government also made allegations against Merck in parallel civil litigation related to Vioxx in addition to the criminal charges.
According to the government, Merck representatives made inaccurate, unsupported or misleading statements about Vioxx's cardiovascular safety, in order to increase sales of the drug. The government also said Merck made false statements to state Medicaid agencies about the drug's safety.
Merck isn't admitting liability or wrongdoing in the civil aspect of the settlement. Mr. Rogers said Merck expressly denies the civil allegations.
'We believe that Merck acted responsibly and in good faith in connection with the conduct at issue in these civil settlement agreements, including activities concerning the safety profile of Vioxx,' said Merck General Counsel Bruce Kuhlik in a statement.
So this is yet another example of a legal settlement made by a health care organization involving that organization paying a fine, but not admitting it did anything wrong.
The Parallel with the Citigroup Settlement
Last week, we wrote about how one US federal judge refused to accept a settlement (in a case of alleged financial misbehavior involving Citigroup) which did not require the company to admit wrongdoing. The judge noted that this presented the logically incomprehensible situation of a company apparently being punished for a reason that is unknown. At that point, one (admittedly outspoken) critic wrote, "This has essentially created a parallel or secret criminal justice system, in which both crime and punishment are adjudicated behind closed doors." Furthermore, these
settlements have evolved into a kind of cheap payoff system, in which crimes may be committed over and over again, and the ... [government's] only role is to take a bribe each time the offenders slip up and get caught.
If you never have to worry about serious punishments, or court findings of criminal guilt (which would leave you exposed to crippling lawsuits), then there’s simply no incentive to stop committing fraud. These SEC settlements simply become part of the cost of doing business....
What No One Had to Admit
In the case of the current Merck settlement, we do know something about the activities that lead to the settlement. The settlement arose out of what was called the "Vioxx scandal." In summary, Vioxx (rofecoxib, Merck) a Cox-2 inhibitor non-steroidal anti-inflammatory drug used for pain, and touted for its ostensibly low risk of gastrointestinal side-effects, was withdrawn from the market in 2004 because of its cardiac risks. The Vioxx case is flush with examples of how the company used deception to market a very profitable drug without regard to its risks to patients.
There is evidence is that the company knew about these effects since 2000, but suppressed the clinical research evidence until 2003.(1) In particular, in 2005, the editors of the New England Journal of Medicine raised concerns that an article published in that journal in 2000 about the results of the VIGOR study of rofecoxib sponsored by Merck failed to report data that would have suggested that the drug caused excess cardiovascular risks.(2) In 2007, the company paid more than $4.9 billion to settle patient lawsuits alleging harm due to Vioxx.(3) Also in 2008, the company made a $58 million settlement of claims its advertising of Vioxx deceptively minimized its risks.(4) In 2008, it became clear that at least one apparently clinical trial of Vioxx, the ADVANTAGE trial, was merely a "seeding trial,' that is, a marketing exercise.(5)
On Health Care Renewal, we starting writing about Vioxx in 2005, including,
- here about ghost-writing of a Vioxx research publication;
- here, and here about allegations that Merck executives tried to intimidate Vioxx critics;
- here about how advocates of an extreme laissez faire approach to regulation of health care corporations used illogical arguments about the Vioxx case;
- here about the ADVANTAGE "seeding trial," that is, a study really meant to recruit supposed physician-researchers as prescribers; and
- here about how one once prominent Vioxx researcher pleaded guilty to fraud in connection with his research on other drugs.
- here about how in settling a shareholder lawsuit Merck vowed to improve its scientific and academic integrity, and refrain from manipulating and suppressing clinical research.
In 2010, we summarized the Vioxx case thus, " the Vioxx case provides a good lesson about some of the tactics used to deceptively and unethically promote health care products (pharmaceuticals in this case)."
In case there are any doubts about the harms patients suffered as a result of using Vioxx as a pain reliever, in 2004, a cumulative meta-analysis of published trials of Vioxx known by then estimated the risk of myocardial infarction (heart attack) due to Vioxx compared with placebo or other non-steroidal anti-inflammatory drugs was 2.3 times the baseline rate.(6) That analysis suggested that there was data by 2000 that Vioxx increased the risk of bad cardiovascular events. A cumulative meta-analysis from 2009 suggested that the risk of death due to Vioxx was 1.7 times the baseline rate.(7) That analysis suggested there was data by 2001 that Vioxx increased the risk of bad cardiovascular events. Graham and colleagues' nested case-control study of Vioxx use in a large managed care organization lead them to estimate that "88 000 - 140 000 excess cases of serious coronary heart disease probably occurred in the USA over the market-life of rofecoxib."(8)
Yet despite all the evidence of deceptive practices used to market Vioxx as a first-line pain reliever, and all the evidence that Vioxx may have lead to a large number of myocardial infarctions and premature deaths, the US government's settlement with the maker of Vioxx allowed it to deny that its marketers concealed the dangers of the drug. This shows that the US regulation of health care organizations has been reduced to Kabuki theatre, detached from reality, and in this case, from what appears to be very clear clinical epidemiological evidence.
As noted above, and by us frequently in the past, as long as the only punishments for bad behavior are fines (paid by the entire organization, not those who authorized, directed or implemented the bad behavior), such "punishments" only modestly add to the cost of doing business, and do not deter future bad behavior. The continuing bad behavior, indicated in part in the parade of legal settlements we have documented, doubtless leads to much of our health care problems, particularly high costs, poor access, poor quality, and demoralized health care professionals.
Like a broken record (for anyone who remembers what that means), I repeat... to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable. As long as they are not, expect the bad behavior to continue. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.
1. Topol EJ. Failing the public health - rofecoxib, Merck and the FDA. N Engl J Med 2004; 351: 1707-1709. Link here.
2. Curfman GD, Morrisey S, Drazen JM et al. Expression of concern reaffirmed. N Engl J Med 2006; 354:1193. Link here.
3. Charatan F. Merck to pay $5bn in rofecoxib claims. Brit Med J 2007; 335: 1011. Link here.
4. Charatan F. Merck to pay $58m in settlements over rofecoxib advertising. Brit Med J 2008; 336: 1208-1209. Link here.
5. Hill KP, Ross JS, Egilman DS, Krumholz HM. The ADVANTAGE seeding trial: a review of internal documents. Ann Int Med 2008; 149: 251-258. Link here.
6. Juni P, Nartey L, Reichenbach S et al. Risk of cardiovascular events and rofecoxib: cumulative meta-analysis. Lancet 2004; 364: 2021-2029. Link here.
7. Ross JS, Madigan D, Hill KP et al. Pooled analysis of rofecoxib placebo-controlled clinical trial data: lessons for postmarket pharmaceutical safety surveillance. Arch Intern Med 2009; 169: 1976-1984. Link here.
8. Graham DM, Campen D, Hui R et al. Risk of acute myocardial infarction and sudden cardiac death in patients treated with cyclo-oxygenase 2 selective and non-selective non-steroidal anti-inflammatory drugs: nested case-control study. Lancet 2005; 365: 475-481. Link here.