Vytorin Settlements Result in $688M Payment for Investors
Merck & Co. has agreed to pay $688 million to settle a financial fraud lawsuit brought by investors, who alleged that the drug maker delayed the release of bad results from clinical trials that raised questions about the effectiveness of the blockbuster cholesterol drug Vytorin.
The Vytorin settlement agreement must still be approved by a federal judge, but would resolve two claims brought by investors against the company, and its subsidiary Schering-Plough.
The lawsuit claimed that the company’s suppressed the results of a study of Vytorin and Zetia, which showed that the products were no more effective than the use of generic Zocor.
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Vytorin is a cholesterol drug that combines Zetia (ezetiminbe) with Zocor (simvastin). It was approved by the FDA in 2004 and was heavily marketed as part of a joint venture between Merck and Schering-Plough before the Merck acquired Schering-Plough.
In August 2009, the companies agreed to pay $41.5 million to settle Zetia and Vytroin class action lawsuits filed by consumers who alleged that the companies hid data for two years that showed the drug to be less effective than advertised. The companies also paid $5.4 million in July to resolve investigations by numerous states into whether they acted illegally in the handling of an effectiveness study, a clinical trial known as ENHANCE.
Questions were raised about the companies’ actions months before the data was released, when the drug makers indicated that they were going to change the ENHANCE study’s measure of effectiveness a year and a half after the study had been concluded. These actions also led to a congressional investigation into whether the drug makers were trying to manipulate scientific data.
The settlement is one of the largest securities class action settlements in history, experts say. While Merck says insurance will pay for some of the settlement, the company took a $493 million charge from its 2012 fourth-quarter results to cover the costs.
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