Table of Content

SR No. Particulars Page No.

N/A Acknowledgment & Declaration 2

1. Introduction
1.1. Basic Intro
1.2. Roots and Early 3
History
1 1.3. Nationalization

1.4. Company’s Overview 4

2. Company’s Lawsuits and

Settlements
2.1. Merck Lawsuits 5
2.1.1. Fosamax
2.1.2. NuvaRing
2 2.1.3. Vioxx

2.2. Settlements for

Lawsuits
2.2.1. Settlement for
Fosamax
2.2.2. Settlement for 6
NuvaRing.
2.2.3. Settlement for
Vioxx.

3. Scandals of Company
3.1. Settlement with IRS in
2007 7
3.2. Overbilling Cases in
3 2008

3.3. Settlement of two

shareholder lawsuits in
2013. 8
3.4. Trial for lying in Court
in 2016

4 References 9

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 Acknowledgment
First, we would like to thank our Instructor, Sir Adnan, for providing us with
this learning opportunity.
Furthermore, we acknowledge that even though this Project is carried out with
utmost care, but it may still contain some errors in it.

Declaration

We, FAIZAN HUSSAIN, WAFA EMAN, WAJEEHA SHABBIR, QURA

TUL AIN, hereby declare that this project is record of the authentic work
carried out by us during the academic year of 2020-2023 and has not been
submitted to any other university or Institute.

Signatures:

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 1. The Introduction

1.1. Basic Introduction to Merck & Co. (USA):

Merck & Co., Inc. is an American multinational pharmaceutical company
headquartered in Rahway, New Jersey. It is named after the Merck family,
which set up Merck Group in Germany in 1668. The company does business as
Merck Sharp & Dohme (MSD) outside the United States and Canada.
Merck & Co. was established as an American affiliate in 1891. Merck develops
and produces medicines, vaccines, biologic therapies and animal health
products. It has multiple blockbuster drugs or products which include cancer
immunotherapy medicine, anti-diabetic medication and vaccines against HPV
and chickenpox.The company is ranked 71st on the 2022 Fortune 500 and 87th
on the 2022 Forbes Global 2000, both based on 2021 revenues.

1.2. Roots and Early History:

Merck & Co. traces its origins to its former German parent company Merck
Group, which was established by the Merck family in 1668 when Friedrich
Jacob Merck purchased a drug store in Darmstadt. In 1827, Merck Group
evolved from a pharmacy to a drug manufacturer company.
In 1887 a German-born, long-time Merck employee, Theodore Weicker, went
to the United States to represent Merck Group. In 1891, family member George
Merck emigrated to the United States and set up Merck & Co. in New York as
the U.S. subsidiary of Merck Group. Merck & Co. operated from 1891 to 1916
as the US subsidiary of the Merck Group.

1.3. Nationalization:
Before the start of WWI, Merck & Co operated as its own business in the US,
although still part of the E. Merck family based in Germany. With the onset of
war in Europe in 1914 though, the relationship between the two nations became
strained and the wheels were put in motion for a complete split.
At the start of the conflict the US, on April 6, 1917 – influenced by the
Germans' use of unrestricted submarine warfare – President Woodrow Wilson
declared the country's formal participation on the side of the Allies.

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With this declaration, the US Government also announced the seizure of several
companies with German connections, including Merck & Co.
Following the seizure announcement, US Federal Judge A Mitchell Palmer put
the stock of Merck in the US up for auction. George Merck and partners
founded McKenna Corporation to participate in the bidding and, in 1919, was
successful in buying back his company for $3.5 million, and fully separating
from E. Merck in Germany.

1.4. Company’s Overview

Type Public Company

Industry Pharmaceutical Industry
Founded 1891; 131 years ago as a
subsidiary of Merck (founded
1668)
1917 as an independent company
Founders Theodore Weicker
George Merck
Headquarters Rahway, New Jersey, U.S.
Area served Worldwide
Revenue (Increase) US$48.70 billion
(2021)
Operating income (Increase) US$13.88 billion
(2021)
Net income (Increase) US$13.05 billion
(2021)
Total assets (Increase) US$105.69 billion
(2021)
Total equity (Increase) US$38.18 billion
(2021)
Number of employees 68,000 (2021)
Website merck.com (US & Canada)
msd.com (international)

Kenneth C. Frazier
(Executive Chairman)
Key People Robert M. Davis
(President and CEO)

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 2. Company’s Lawsuits and Settlements

2.1. Merck Lawsuits:

The company has faced several lawsuits related to drug problems

some of those lawsuits were on the following drugs:

2.1.1. Fosamax:

This drug is used to treat osteoporosis, but it has side effects such as
bone fractures, Dead Jaw Syndrome, esophagus problems, and
musculoskeletal pain. Merck did not tell the patients of the side
effects and later people sued them. In New Jersey, there are more
than 560 lawsuits pending for bone fractures by taking the medicine
as of May 2018. More Fosamax lawsuits are pending in multicounty
litigation (MCL) and state courts.

2.1.2. NuvaRing:

Organon, a subsidiary of Merck, manufactures NuvaRing, a birth

control ring associated with life-threatening blood clots. Because of
the possible side effects, the FDA released a drug safety
communication in October 2011. People filed more than a thousand
federal NuvaRing lawsuits.

2.1.3. Vioxx
The Vioxx is one of Merck’s most well-known drug recalls, It is one
of the most famous drug-related case ever. Vioxx is a COX-2
inhibitor (pain reliever). It was linked to an increased risk of
cardiovascular problems like heart attack and stroke.

The painkiller was on the market for five years before Merck pulled
the plug. The FDA approved Vioxx in 1999. An estimated 25
million Americans used the drug.

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 Merck denied reports of dangerous cardiac side effects for years. But
in September 2004, it pulled the drug from the market. It based its
decision on findings from a clinical trial called APPROVe.

Vioxx was blamed for more than 3,400 deaths. Since the drug was
withdrawn Merck has faced about 26000 lawsuits involving 47000
people.

2.2. Settlements for Lawsuits:

2.2.1. Settlement for Fosamax:

Merck paid millions in settlements and jury verdicts to thousands of
people who say Fosamax caused their injuries. According to the
New York’s reuters:

“After a decade of fighting lawsuits Merck agrees to proposed $27.7

million settlement over Fosamax lawsuits. NEW YORK (Reuters) -
Merck & Co Inc said on Monday that they are prepared to pay
$27.7 million to settle lawsuits by hundreds of people who sued the
company over allegations that its osteoporosis drug Fosamax
caused bones in the jaw to deteriorate.”
~ 09 – Dec – 2013

The company settled the cases relating to jaw bone syndrome in

2013 but the cases related to bone fractures were pending upto 2022
until the court gives verdict in the favor of Merck & co. The
company pleaded that the FDA does not allow us to gives the
detailed side effect on the tablet so it is not their fault that law of
state prevent from a thing and they have to pay for it.

2.2.2. Settlement for NuvaRing:

People filed more than a thousand federal NuvaRing lawsuits. The
company settled almost all of them for $100 million in 2014.

2.2.3. Settlement for Vioxx:

The most renowned case for Merck & Co. The company kept lying
even though they knew that this medicine has side effects related to
heart disease and was resulting in Heart strokes in consumers.

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 The company settled the case for a $2.3 Billion settlement getting
rid of all the lawsuits against them related to Vioxx.
After the Vioxx Settlement, the shareholders of the company sued
Merck & co. for lying to them. Merck paid nearly $7 billion to settle
tens of thousands of Vioxx lawsuits and to cover civil and criminal
fines related to Vioxx.

3. Scandals of Company

3.1. Settlement with IRS in 2007:

In 2007, the company settled the tax dispute by paying the Internal Revenue
System $2.3 Billion. The settlement closed the investigations going on for
almost a decade following the tax records from 1993 to 2003.

“Merck will pay the federal government $2.3 billion to resolve roughly a
decade of disputed back taxes, in one of the largest publicly disclosed
settlements between a U.S. corporation and the Internal Revenue Service.”

~ Wall Street Journal

(Feb 15, 2007)

 Merck, which employed 61,500 people in 2007, reported total revenue of

more than $22.6 billion in 2006.

3.2. Overbilling Cases in 2008:

A fraud investigation by the United States Department of Justice began in

2000 when allegations were brought in two separate lawsuits filed by
whistleblowers (one of which was a former employee of Merck) under the
False Claims Act.
On February 7, 2008, Merck agreed to pay $671 million to settle charges
that it routinely overbilled pharmacies and bribed doctors to sell its most
popular medicines. The settlement was one of the largest pharmaceutical
settlements in history.

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3.3. Settlement of two shareholder lawsuits in 2013:

“Merck to pay $688 million to settle Enhance lawsuits.”

~ Reuters
(February 14, 2013)

Merck & Co MRK.N has agreed to pay $688 million to settle two U.S.
class-action lawsuits by shareholders who said they lost money because the
company concealed the poor results of a clinical trial of the anti-cholesterol
drug Vytorin.

The shareholder alleged that Merck knew more than a year in advance that
the trial of Vytorin was a failure but withheld that information from
investors.
Merck said it will pay $215 million to settle a lawsuit brought by investors
in its securities, and $473 million to settle a lawsuit by Schering investors
who were shareholder of Merck & co.

3.4. Trial for lying in Court in 2016:

Gilead is a pharmacist company making the medicine Sovaldi and Harvoni,

which have revolutionized the treatment of Hepatitis C, with cure rates of
more than 90 percent. The viral disease is estimated to infect about 3.2
million Americans and can lead to liver failure.

A jury in federal court in San Jose, California, awarded Merck $200 million
in 2016 after finding Sovaldi and Harvoni infringed two of its patents.

A judge threw out the verdict later that year, ruling the patents were
unenforceable based on the company’s conduct. The Judge noted that, in the
process of applying for one of the patents, Merck used confidential
information it obtained in 2004 while discussing a possible partnership with
Pharmasset Inc, a company Gilead bought in 2011.

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References:
1. https://en.wikipedia.org/wiki/Merck_%26_Co.#cite_note-28
2. https://www.pmlive.com/pharma_news/this_month_in_1917_a_tale_of_two_mercks_560187
3. https://www.drugwatch.com/manufacturers/merck/
4. https://www.jci.org/articles/view/38430#:~:text=Some%20consider%20the%20voluntary%20removal,loss
%20of%20a%20valuable%20drug.
5. https://www.reuters.com/article/us-merck-fosamax-idUSBRE9B811S20131209
6. https://www.wsj.com/articles/SB117146140594708543
7. https://www.law360.com/articles/18662/merck-agrees-to-2-3b-settlement-with-irs#
8. https://www.justice.gov/archive/opa/pr/2008/February/08_civ_094.html
9. https://en.wikipedia.org/wiki/Merck_%26_Co.#:~:text=In%202005%2C%20CEO%20Raymond
%20Gilmartin,a%20US%2441%20billion%20deal.
10. https://www.denverpost.com/2008/02/07/merck-settlement-one-of-largest-ever-in-health-fraud/
11. https://www.reuters.com/article/us-merck-settlements-idUSBRE91D0R520130214
12. https://www.reuters.com/article/us-merck-gilead-ruling-idUSKBN1HW24U