How much can one bad drug cost a company? Just ask Merck. When its painkiller drug Vioxx was pulled from the market in 2004, Merck was facing 27,000 lawsuits which culminated in a $4.85 billion settlement.

Then last year the U.S Department of Justice reached a $950 million civil and criminal charge settlement against Merck for its off-label and misleading marketing.

But wait, there’s more.

Pharmalot reports a federal just ruled Merck is on the hook to provide damaging documents to shareholders who sued the drug company for securities fraud. The judge in the case decided in a 7-page ruling that Merck had already waived its attorney-client privilege in providing documents to the Justice Department. That laid the groundwork for the attorney-client privilege to be waived in future litigation.

Merck in the Vioxx saga ushered in a new era of corporate criminal wrongdoing eclipsing Fen-Phen and Rezulin and showed the underside of drug marketing.

No Merck executives were held accountable for misdeeds such as marketing Vioxx for rheumatoid arthritis, for which is had not been approved, or authorizing sales reps to make false statements to increase sales.

Vioxx tripled the risk of heart attacks and strokes even though the sales reps denied those claims. These findings were found in the company’s own studies conducted to determine if the drug would be useful in treating Alzheimer’s disease, but the results were never presented because the information was not favorable. Clearly Merck consistently put profits over people.

When these false statements lead to overbilling to Medicaid, the government gets serious which led to the criminal and civil fines.

What did Merck know and when did it know about the dangers of Vioxx will be the focus of the search of those documents.

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