By Casey Sullivan
Feb 15 (Reuters) - Merck & Co will pay $688 million to
settle accusations it covered up poor results of a clinical
trial of an anti-cholesterol drug, but the deal is unlikely to
prompt other pharmaceutical companies to be more transparent in
disclosing the results of their own trials, according to legal
and healthcare experts.
The settlement, over the drug Vytorin, is one of the largest
in a securities fraud case that doesn't involve a government
finding of wrongdoing against a company, according to attorneys
who represented the U.S. investors who sued Merck.
The investors claimed in two class action lawsuits that
Merck and Schering-Plough Corp, Merck's former marketing partner
for Vytorin, knew more than a year in advance that the trial of
the anti-cholesterol drug was a failure but withheld that
information from investors. The study of the drug was called
Because the $688 million settlement stemmed from investors'
financial losses rather than from a U.S. Food and Drug
Administration enforcement action, the payment is unlikely to
alter the way other drug makers conduct trials, according to the
"We don't know if (Merck) is guilty of wrongdoing, or if
they just didn't want to litigate," said Devon Herrick, a
healthcare economist with the National Center for Policy
Steve Guggenheim, a securities litigation partner with
Wilson Sonsini Goodrich & Rosati, said the investors' settlement
figure does not necessarily reveal anything about the drug
maker's drug trial disclosure practices.
Instead, he said, the settlement reflects the power of
class action litigation, which "puts enormous pressure on a
company to settle, regardless of whether the suit is
Salvatore Graziano, an attorney with Bernstein Litowitz who
represented investors in both Merck and Schering-Plough, said
the settlement puts a spotlight on the way companies report drug
"Hopefully it will grab the attention of the companies in
this industry and make them appreciate that allegations like
this can make them liable under securities laws," said Graziano.
A spokesman for Merck said in a statement that the company
wanted to "put (the lawsuit) behind us."
"Merck continues to believe that it acted responsibly in
connection with the Enhance study, and this agreement contains
no admission of liability or wrongdoing," the spokesman said.
Follow us on Twitter @ReutersLegal | Like us on Facebook