Merck Settles Sales, Marketing Probes

PHILADELPHIA -(Dow Jones)- Merck & Co. (MRK) has agreed to pay more than $650 million to resolve government investigations and lawsuits related to the drug maker's pricing programs and marketing efforts.

The settlements resolve allegations that Merck underpaid rebates to the Medicaid health program for the poor, in connection with drugs Zocor, Vioxx and others. Also, the settlement resolves accusations that Merck paid improper inducements to doctors and other health-care professionals.

The Merck settlements are the latest examples of heightened government scrutiny of the pharmaceutical industry, which has stemmed from increased drug prices, questionable marketing and advertising practices and drug safety concerns. What's more, Merck recently agreed to a $4.85 billion settlement of product-liability litigation surrounding Vioxx.

"When a big drug company like Merck takes extraordinary and excessive measures to artificially sustain higher prices the government must pay for drugs, or engages in kickbacks to increase market share, higher costs to all of us are the bottom line," Patrick Meehan, U.S. Attorney for the Eastern District of Pennsylvania, said at a press conference here Thursday.