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Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

Nominal Pricing Fraud

Merck was accused of violating the Medicaid Rebate Statute in marketing its cholesterol drug Zocor, its prescription pain medication Vioxx, and its anti-heartburn drug Pepcid. Merck allegedly offered hospitals large discounts for all three products if hospitals used them instead of competitors’ brands. The law requires companies to sell drugs to Medicaid at the best price they offer to any customer, but in this instance Merck did not offer similar discounts to Medicaid. Merck was also alleged to have induced physicians to use its products through the payment of illegal kickbacks. In February 2008, Merck agreed to pay more than $650 million to settle the allegations, brought in two separate False Claims Act lawsuits. Merck also entered into a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General.

Misconduct Type
Health
Enforcement Agency
Multiple Agencies
Contracting Party
None
Court Type
Civil
Disposition
Settlement
Date of Announcement
2/7/2008
Contractors Involved Penalty
Total
Merck & Co., Inc. $650,000,000
Further Information Released
Corporate Integrity Agreement 3/4/2008
DOJ Press Release 3/4/2008
Settlement Agreement (Steinke Lawsuit) 3/4/2008
USAO Press Release 3/4/2008

Federal Contractor Misconduct Database