Justice investigating Merck, Schering-Plough

Vytorin marketing questioned as sales fall, lawsuits climb

TRENTON, N.J. - Lawsuits against Merck & Co. and partner Schering-Plough Corp. related to their marketing of the cholesterol drug Vytorin are piling up, and the Department of Justice has begun investigating the drug makers' conduct, according to a regulatory filing.

Justice's Civil Division notified Merck in a Sept. 10 letter that the department is investigating whether the drug makers' promotion of Vytorin resulted in false claims to federal healthcare programs, Merck noted in a filing to the Securities and Exchange Commission late Monday. If so, federal health programs could seek to recover money they have spent on the drug.

Thirty-five state attorneys general are jointly investigating whether the partners violated state consumer protection laws in their marketing of Vytorin, Merck reported.

And, since January, Merck has been served with or become aware of about 140 class-action lawsuits alleging consumer fraud in connection with two cholesterol drugs sold and promoted by the partners' joint venture. Some lawsuits allege personal injuries or seek medical monitoring for people who used the drugs, the filing said.

"We take this matter very seriously," Skip Irvine, a spokesman for the joint venture, said yesterday. "We're cooperating with the request for information that the Justice Department is seeking."

Merck also said in the SEC filing that it is cooperating with the other investigators.

Vytorin and one of its components, Zetia, have been blockbusters in the lucrative cholesterol market, with a combined $5.2 billion in 2007 revenue.

But repeated bad news about the drugs this year has cut revenue about 15 percent since last fall - they brought in only a combined $1.1 billion in the third quarter - contributing to new rounds of layoffs at both Merck and Schering-Plough.

In January, under pressure from congressional investigators, the companies released results of a long-delayed study showing pricey Vytorin was no better at reducing plaque buildup than its second component, generic cholesterol drug Zocor, costing about one-third less than the brand name treatment.

That led to the investigations by congressional committees as to whether the companies deliberately delayed releasing the study's results to boost sales of Vytorin and Zetia, a charge the companies have denied.

The investigations are being conducted by the Senate Finance Committee and the House Committee on Energy and Commerce's Subcommittee on Oversight and Investigations.