Merck’s Morass Of Marketing Probes: DoJ Seeks Data On Three More Drugs
This article was originally published in The Pink Sheet Daily
Executive Summary
Department of Justice has requested data on AzaSite, which Merck gained in its acquisition of Inspire Pharmaceuticals, Integrilin and Avelox.
Another quarterly earnings report brings another notice of a government investigation of Merck & Co. Inc.’s marketing practices.
In its Nov. 8 filing with the Securities and Exchange Commission, Merck cited two new probes involving three drugs, one of which it obtained through its May acquisition of Inspire Pharmaceuticals Inc.
Merck said it had received a civil investigative demand from the Department of Justice that was addressed to Inspire Pharmaceuticals. The demand concerns a False Claims Act investigation alleging Inspire marketed AzaSite (azithromycin) for off-label uses.
Approved for the treatment of bacterial conjunctivitis, AzaSite is one of Inspire’s top-selling drugs, generating revenue of $43 million in 2010 (Also see "Merck's Latest Inspiration Is Bolt-On Acquisition of Inspire Pharma for $430M" - Pink Sheet, 5 Apr, 2011.).
Merck also received a subpoena from DoJ requesting information relating to its marketing and selling activities for the thrombolytic Integrilin (eptifibatide) and antibiotic Avelox (moxifloxacin) from January 2003 to June 2010.
The drugs are the subject of a civil federal health care investigation. For the nine months ended Sept. 30, 2011, Integrilin had revenue of $172 million and Avelox had revenue of $227 million.
DoJ And Merck Continue To Discuss Vioxx Settlement
In its August 10-Q filing, Merck reported that DoJ had issued a subpoena for information about marketing and selling activities related to Temodar (temozolomide), PegIntron (peginterferon alfa-2b) and Intron A (interferon alfa-2b) (Also see "No End In Sight: Pharma Companies Continue To Face Government Probes" - Pink Sheet, 15 Aug, 2011.).
DoJ also has an ongoing investigation of Merck’s research, marketing and selling activities relating to Vioxx (rofecoxib). Merck reported last year that it had established a $950 million legal reserve in anticipation of resolving the probe (Also see "Merck To Join Pfizer and Lilly At Top of DoJ Settlements Chart" - Pink Sheet, 8 Nov, 2010.). Merck said in its current filing that it is continuing discussions with the government concerning Vioxx.
Several other companies also are in negotiations with DoJ to resolve investigations of their marketing practices. Last week GlaxoSmithKline PLC announced it had reached an agreement in principle to pay $3 billion to resolve three separate government investigations (Also see "GSK’s Deal With DoJ Is Fourth In Eight Years; Exec Liability Uncertain" - Pink Sheet, 7 Nov, 2011.).
And Abbott Laboratories Inc. noted in its third quarter earnings report that it has reserves of $1.5 billion relating to settlement discussions with DoJ over its investigation of Depakote (divalproex) sales and marketing practices.