Merck Settles Vioxx Ad Case for $58 Million

Marketer Mandated to 'Pre-review' Spots to FDA; DTC Moratorium Raised Again on Hill

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WASHINGTON ( -- Merck & Co. today reached a $58 million settlement with 30 state attorneys general over ads for Vioxx. As part of the deal, the company also agreed to steps that could delay DTC advertising for its medicines for months to years.

The agreement, announced by Oregon Attorney General Hardy Myers, resolved a three-year investigation of the company's Vioxx marketing. "Merck's aggressive early promotion of Vioxx drove hundreds of thousands of consumers to seek prescriptions before Vioxx's risks were fully understood," he said. Mr. Myers called it "the largest money settlement a consumer-protection multistate group has ever received in a pharmaceutical case."

Pre-review required
The settlement requires Merck to submit all direct-to-consumer TV ads to the Food and Drug Administration prior to their airing -- a procedure most, if not all, drug companies now go through voluntarily.

In the biggest change, Merck must now hold off on advertising new pain-relieving drugs if the FDA recommends a delay for any reason. In addition, Merck agreed to wait for the FDA to specifically approve ads for any of its drugs, not just pain drugs, before airing them.

"Merck agrees to submit all new DTC television advertising campaigns for any Merck product to FDA for pre-review, wait until Merck receives a response from FDA prior to running the advertising campaign, and to modify such advertising consistent with any written comments from FDA," according to a settlement agreement the company signed.

Controversial but necessary
Pre-approval of DTC advertising, though urged by some legislators, has been controversial with drug companies and ad associations, which argue it lets the FDA ban ads simply by not acting on approving the spots.

Mr. Myers said the agreement was necessary.

"Today's action gives the FDA clear discretion and authority to assess all new Merck pain drugs and requires Merck to seek approval from the FDA prior to running television ads," Myers explained.

In April, Merck announced it had taken a pre-tax charge in the first quarter of $55 million in anticipation of the settlement. In a statement, the company said it believed it had acted "in good faith" in marketing Vioxx.

'Balanced information'
"Merck remains committed to communications that help patients and their physicians choose medicines based on accurate, fair and balanced information," said Bruce Kuhlik, exec VP-general counsel of Merck. "Today's agreement enables Merck to put this matter behind us and focus on what Merck does best, developing new medicines."

DTC advertising has increasingly drawn attention from Capitol Hill. Most recently, a letter from House Energy & Commerce Committee Chairman John Dingell, D-Mich., and Rep. Bart Stupak, D-Mich., chairman of the committee's Oversight and Investigations panel, asked CEOs of four drug companies and the Pharmaceutical Research and Manufacturers Association of America to commit to several DTC changes. Among other commitments sought in the letter, the companies were asked to voluntarily agree to a two-year moratorium on DTC ads for new drugs.
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