On a day that Merck announced its intent to lay off 8,500 employees, a federal judge approved a settlement in which Merck agreed to pay $688 million for allegedly defrauding shareholders.
Merck agreed to pay this amount in order to resolve a class action lawsuit in which it was alleged that the company withheld adverse results of a clinical trial of Vytorin and Zetia, two anti-cholesterol drugs. The purpose of the clinical drug trial was to determine whether adding Vytorin and Zetia to Zocor helped lower atherosclerosis more than using Zocor by itself. The trial showed that there was no benefit in using the additional drugs, but Merck concealed those results for a year. This was important information that investors would have relied upon in deciding whether to invest in Merck and/or Vytorin.
Had Merck not withheld the results of the clinical drug trial, perhaps some of that $688 million would have been available to save the jobs of the 8,500 employees whose layoffs were just announced (in addition to 7,500 other job cuts Merck announced earlier this year). Sadly, it is an all too common occurrence for a drug manufacturer to withhold unfavorable results from clinical drug trials when the results would delay getting products to market or harm drug sales.