Merck, the pharmaceutical giant is penalized for approximately $1 billion to resolve criminal and civil charges for wrongful marketing of Vioxx, its earlier hit painkiller, the US Department of Justice said.
Merck agreed to plead guilty to breaking the Food Drug and Cosmetic Act after it promoted Vioxx for rheumatoid arthritis when the drug had not been approved for that disease, the department statement said in a statement.
The criminal fine amounts to $321.6 million.
It also agreed to pay $628.4 million to settle civil charges related to the marketing of Vioxx and making false statements about its safety.
Merck began marketing the drug, known by its generic name of rofecoxib, in 1999, promoting it not just for its approved use as a painkiller but also as a way to fight arthritis.
The Justice Department said it ignored warnings to stop doing so and continued to do so until 2004, when Vioxx was pulled from the market after it was linked to a higher risk of heart attacks and stroke.
"The settlement resolves allegations that Merck representatives made inaccurate, unsupported, or misleading statements about Vioxx's cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government," the Justice Department said.
"Like the criminal plea, the civil settlement also recovers damages for allegedly false claims caused by Merck's unlawful promotion of Vioxx for rheumatoid arthritis."
While Merck agreed to the fines, it said in the settlement that the agreement "is neither an admission of facts or liability by Merck."
"Merck expressly denies the contentions and allegations of the United States as set forth herein and denies that it engaged in any wrongful conduct" with the exception of what it admitted specifically in the plea agreement.
Merck has faced numerous lawsuits over the medicine from customers since withdrawing it from the market.