Merck inks $5.9M settlement to wrap up AzaSite off-label investigation

Inspire Pharmaceuticals' AzaSite is approved to treat bacterial conjunctivitis, more commonly known as pink eye. But that's not all the company hawked it for when it was part of Merck & Co. ($MRK), the U.S. Justice Department says.

The New Jersey pharma giant has agreed to fork over $5.9 million to wrap up the Justice Department claims, which say Inspire--acquired by Merck in 2011 and later sold--promoted AzaSite off-label for uses including blepharitis, another eye condition. Because of that marketing, doctors prescribed the med for off-label uses, and federal healthcare programs shelled out millions of dollars in false claims, allegations say.

For Merck's part, it's glad to put the case--initiated in 2010 by a purported whistleblower--"behind us," spokeswoman Lainie Keller told Reuters in a statement. That lawsuit concerns activities that occurred before Merck bought Inspire, now a part of Illinois' Akorn Pharmaceuticals ($AKRX), she added.

It's not uncharted territory for Merck, which in 2011 handed over $950 million to resolve allegations over anti-inflammatory blockbuster Vioxx. That settlement included a $321.6 million criminal fine--for a misdemeanor misbranding violation--and a $628.4 million payment to wrap up civil claims, including those filed by 40 state attorneys general.

The AzaSite settlement is just a fraction of that total, but that's the way prosecutors have been moving as of late. They've focused on much smaller cases--and smaller drugmakers--as the Justice Department ramps up enforcement--in addition to the larger ones, of course.

That's how Shire ($SHPG) recently found itself agreeing to pay $56.5 million to put aside claims that it overstepped its bounds while promoting several ADHD meds, including top sellers Adderall XR and Vyvanse. And in April, Pacira Pharmaceuticals ($PCRX) received a subpoena from federal prosecutors demanding information about its marketing for post-surgery pain treatment Exparel.

- get more from Reuters
- see the settlement document (PDF)

Special Report: Pharma's top 11 marketing settlements - Merck - Vioxx