The Wall Street Journal-20080201-Federal Grand Jury Probes Merck-s Handling of Vioxx

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Federal Grand Jury Probes Merck's Handling of Vioxx

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Merck & Co. is the subject of a federal grand-jury probe into its sales and marketing practices for Vioxx, the painkiller it pulled from the market in 2004, according to a person familiar with the matter.

The health-care-fraud unit of the U.S. Attorney's Office for the District of Massachusetts is investigating whether Merck promoted Vioxx to health-care professionals for uses other than those approved by government regulators, a practice known as off-label marketing, this person said.

Merck declined to comment, said Kent Jarrell, a legal spokesman for the big pharmaceuticals maker.

Merck withdrew Vioxx after a study linked it to increased risk of heart attacks and strokes. The company faced some 27,000 lawsuits from people alleging injuries from the drug. In November, Merck struck a tentative $4.85 billion settlement.

The grand-jury investigation comes at a time when thousands of plaintiffs are weighing whether to enroll in the pending settlement.

"The potential of an indictment can clearly be an incentive for [Merck] to settle civil cases," said Joseph L. Doherty, of Doherty & Quill, a Boston law firm. Mr. Doherty has one Vioxx client, whom he says he hadn't intended to enroll in the settlement. "The mere potential of an indictment probably won't change too many people's minds about whether to enter the proposed settlement."

In February 2007, the Whitehouse Station, N.J., company disclosed in its regulatory filings that the Justice Department issued a subpoena requesting information relating to the company's research, marketing and sales of Vioxx as part of a federal investigation under criminal statutes.

Merck disclosed in that filing that 31 state attorneys general and the District of Columbia are investigating its sales and marketing of Vioxx. The company said it is cooperating with authorities in all of these investigations.

Justice Department probes into drug marketing have resulted in settlements of $875 million with TAP Pharmaceuticals in 2001 and $355 million with AstraZeneca in 2003. Eli Lilly & Co. is negotiating with federal investigators regarding its marketing of antipsychotic drug Zyprexa.