Does it make you uneasy when you hear that a global healthcare company that provides prescription medicines, vaccines, and therapies for humans and animals has been named in dozens of high-dollar lawsuits? Merck is a German science and technology company with research and development operations around the world. But, it has its share of legal problems. Here are ten examples of the largest and most impactful lawsuits you should see.
10. Merck’s NuvaRing costs them millions Settlement amount: $100 million
Time confirmed that Merck’s NuvaRing birth control product was the source of dangerous side effects. This includes stroke, heart attacks, blood clots, and sudden death in some users. The ring contained the same hormones found in birth control pills. Progestin and estrogen include a risk of cardiovascular issues. Merck & Co. admits to no wrongdoing in the case. It follows a barrage of birth-control-related lawsuits over death and disability.
Merck offers a settlement amount of $100 million in a fund for claimants. 3,000 women were eligible to participate in the settlement arrangement. Although Merck pays $100 million in penalties and restitution to plaintiffs, this was one of the small lawsuits for the pharma giant. The company made far more from the sales of NuvaRing than it paid out in settlement agreements. Lawsuits are the cost of doing business in the Pharma industry.
9. Merck, Schering-Plough Corporation penalized for competition-related offenses Penalty amount: $345 million
Schering-Plough is a subsidiary of Merck. The company was accused of competition laws violation on two counts in 2004. The Department of Justice’s Civil Division investigated allegations of kickbacks and bribery for fraudulent pricing of its allergy medication Claritin. The investigation revealed that Schering-Plough Corporation staff engaged in fraudulent pricing practices, offering kickbacks and bribery, resulting in charges of criminal activities that violated the False Claims Act and other laws.
The Department of Justice, fined Merck and its subsidiary $52.5 million after they entered a guilty plea for the alleged crimes. More than $292 million in penalties were assessed for fraudulent pricing activities. The total cost of the settlement was $345 million. The case was resolved in 2004. However, it’s worth noting that Schering -Plough has a history of making poor choices and participating in illegal activities. It cost Merck hundreds of millions during its time as a Merck subsidiary.
8. Merck sued for patent infringement over the Keytruda patent Settlement amount: $625 million
Merck’s development of an anti-cancer drug cost them hundreds of millions in legal woes. Its similarity to a joint effort by Ono Pharmaceuticals and Bristol-Meyers Squibb created a legal debate and fight over patent infringements over the competing cancer treatment drugs. DCATVCI confirms that the Ono Pharmaceutical Company of Odaka Japan, and Bristol-Myers Squibb, filed a lawsuit against Merck for its sale of Keytruda, which they claim infringed on its patent for the similar antibody drug Opdivo. Both drugs are PD-1 antibody drugs that fight cancer.
The litigation sought damages from Merck, which resulted in the pharmaceutical companies coming together to work out the details of an agreement to share continued use of the drug class with Merck paying royalties on Keytruda sales, and a one-time settlement to resolve the case. Merck agreed to pay a one-time settlement arrangement of $625 million to resolve the case. Upon the agreement, all parties dropped their claims.
7. Merck paid hundreds of millions for Medicaid fraud Settlement amount: $650
Class Action reported that the government went after Merck for allegations of criminal activities. The pharmaceutical giant allegedly sold hospitals volumes of the antacid Paid, the cholesterol drug Zocor, and Vioxx at a discounted rate of 92%. The medications prescribed drugs to patients with low-income status, but when released from the hospitals, the patients continued to purchase the prescription at full price, even though comparable alternative drugs were available. Medicaid paid the cost of the prescriptions for patients on their plans, defrauding the government, by charging them 92% more than what the hospital paid.
It’s illegal for pharmaceutical companies to charge the client more for a drug than another. The discount that Merck gave the hospital was not illegal, but charging others the full price was. The government estimated that Merck had cheated them millions of dollars for not quite a decade. The United States Department of Justice investigated the claims and found Merck guilty. Merck settled with the DOJ and paid a fine of $650 million in 2008. The case serves as an example of the under-the-table deals struck by big-name pharmaceutical companies to squeeze his reimbursements from the government.
6. Merck accused of concealing poor results from shareholders in Vytorin case Settlement amount: $688 million
In 2013, Merck settled claims from two class-action lawsuits, claiming that the pharmaceutical company had hidden poor clinical trial results for Vytorin. Vytorin is an anti-cholesterol drug tested for its ability to prevent plaque buildup in arteries. The more expensive drug was no better than cheaper alternatives. The Enhance study that tracked the clinical trial results came out in 2008, causing shares of Merck stock to plummet by 15%. Merck failed to disclose the results for over a year, leading investors to believe that the new drug in the pipeline could cause stocks to rise. Two class action lawsuits were filed against Merck & Co., claiming deceptive practices for the gain of selling more shares of its stock to investors who were misled by a lack of the facts.
The drug failed in 2006, but Merck took nearly two years to make the announcement. Their actions were classified as violations of securities laws. Schering-Plough, a subsidiary of Merck was previously involved in the same type of scandal, leaving Merck to pay penalties of $688 million. The settlement included $215 million to resolve the securities violations, and damage to investors, and $473 million to settle a previous securities class action suit. The case was resolved in 2013, according to GenEng News. The Vytorin case was one of several that have been ongoing for years, surrounding deceptive practices and hiding information from shareholders. Similar charges were filed for hiding results of negative data on its drug Vioxx.
5. Merck plagued with lawsuits over Vioxx in 2016 Settlement amount: $830 million
Merck has paid billions in various lawsuits over the dangers of its drug Vioxx. The medication was marketed as an anti-inflammatory drug to reduce pain and discomfort for osteoarthritis and other conditions. It caused patients using the drug to increase the risk for strokes and heart attacks two-fold. Reuters explains that twelve years after Merck resolved thousands of lawsuits seeking damages for dangerous and sometimes fatal heart attacks, it was hit with another expensive claim. Plaintiffs filed a multi-district class action lawsuit against Merck for its knowledge of the negative associations and health risks of the drug, and its willingness to keep the information a secret from investors. Nor did they inform shareholders about negative information that emerged through the clinical trials of the drug.
The lawsuit was filed in a federal court of law in New Jersey. More than a decade after shelling out billions in penalties and lawsuit settlements, investors alleged financial damage from the deceptive practices on the part of Merck, for keeping them in the dark about the negative aspects of the drug, that would affect its sales and ultimately prices of Merck stock. Investors who purchased stocks in Merck between May 21, 1999, through October 29, 2004, were reimbursed for their estimated financial losses and paid attorney’s fees in the settlement that cost Merck $830 million in 2016. Merck was careful to add that their settlement of the matter did not include admitting to any wrongdoing or liability. Other lawsuits over various aspects of the Vioxx scandal are still pending for securities violations.
4. Merck was fined nearly a billion for illegal marketing activities Settlement amount: $950 million
The US Department of Justice reported that Merch sharp & Dohme was accused of illegal marketing of its pharmaceutical product Vioxx. Criminal charges filed against the pharmaceutical giant accused the company of misbranding the drug Vioxx in multiple states. The activities violated the Food Drug and Cosmetic Act. Merck negotiated with the USDOJ to arrive at a settlement deal to accept its plea of guilty to committing a misdemeanor act. Merck paid a criminal fine of $321,836 for its misdeeds for one count of the crime. Vioxx was not approved by the FDA for use as a rheumatoid arthritis treatment, yet Merck moved ahead with promotions for that purpose in 1999. The drug had been withdrawn from the market in the Fall of 2004.
Merck had not applied for approval for the off-label use of Vioxx for arthritis treatment, but it had approved labeling it for three other uses. The drug was eventually approved for use in treating RA in 2002, three years after marketing commenced. Merck illegally promoted the drug for three years. The total amount of the settlement with the civil penalties of $628,364,000 brings the total of the settlement to $950 million.
3. Merck paid out $1 billion in 15 lawsuits Settlement amount $1 billion
Financial Recovery Technologies reports that Merck paid out $1 billion in reimbursements and penalties to resolve a collection of 15 lawsuits aimed at the company for its participation in hiding information on the drug Vioxx, and for marketing the drug for off-label use, which violated the laws regulating dispensation of drugs. The company pays $830 million directly to shareholders. It also faces penalties for the legal fees and attorneys of the plaintiffs. The total amount exceeds $1 billion.
2. Merck & Co. fined billions for tax violations Penalty amount: $2.3 billion
The Internal Revenue Service investigated claims that Merck & Co, committed financial offenses in the form of tax violations. IRS Newsroom confirmed that a civil case at the federal level took action on reports that Merck used minority equity interest financing transactions to avoid paying taxes. They committed tax law violations, resulting in an underpayment of the legal taxes owed by the corporation.
Merck and the IRS negotiated the multiple issues. The entities came to an agreement with a multi-billion dollar penalty for federal taxes owed to the government. Furthermore, this is plus penalties and net interest. The disputed tax accounting was from 1993 to 2001 era. The examination process uncovered the disputed areas and clarified the laws and rules. In addition to paying a penalty of $2.3 billion, Merck agreed to implement various issue management strategies. This is to resolve the issues in question and to fix the tax issues that arise in upcoming tax years. Finally, the civil case concluds on February 24, 2007. However, Merck and the Internal Revenue Service cooperated fully with one another to settle.
1. Merck hit with 26,600 lawsuits with 47K Plaintiffs over rofecoxib claims Settlement amount: $4.85 billion
The 2011 settlement over the illegal promotion of Viox cost Merck nearly a billion dollars. The previous settlement was less than a fifth of the settlement paid for claims that the drug was dangerous. The number of lawsuits against Merck skyrocketed, per NCBI. this was one of the largest settlements in the pharmaceutical industry when it settled in 2007. Merck discovered that Rofecoxib (Vioxx), increased the risk of a heart attack in patients by double. Finally, the FDA approved the drug in 1999, for pain management for osteoarthritis. However, studies showed that not only heart attack risks increased, but also the risk of stroke.
Families of victims filed lawsuits over wrongful deaths of loved ones. The cases kept piling up once the word was out about the findings and known dangers of the drug. Merck agreed to combine the 26,600 lawsuits. There are few hundred pending class actions on the horizon for a settlement amount of $4.85 billion as a resolution. Money goes into a settlement fund set aside for qualifying claims. The victims or families, must prove that the affected person took the drug and suffered a stroke or heart attack. However, the deadline for filing claims expired the day after November 8, 2007.