Merck and Co. has agreed to pay more than $650 million to settle claims that it overcharged Medicaid programs for four drugs, including Vioxx and Zocor, and to resolve allegations of improper marketing to doctors, according to a February 7, 2008 press release from the U.S. Dept. of Justice.
Two separate whistleblower suits were involved. The suits alleged that Merck violated the Medicaid Rebate Statute in marketing several of its drugs by offering deep discounts if hospitals used large quantities of those drugs in place of competitors’ brands. Merck didn’t include these prices in its calculation of “best price” as supplied to Medicare. The pharmaceutical company was also accused of paying improper kickbacks to doctors.
The federal government will receive more than $360 million, and forty-nine states and the District of Columbia over $290 million.