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February 7, 2008

Attorney General Corbett announces $8.5 million PA drug pricing settlement with Merck & Co.
                              involving Zocor, Vioxx & Pepcid

HARRISBURG - Attorney General Tom Corbett today announced that Pennsylvania will receive
more than $8.5 million as part of two separate national settlements with Merck & Co., over the
pricing of various drugs, including Zocor, Vioxx and Pepcid.

The national settlements with Merck, totaling $649 million, involve 49 states, the District of
Columbia and the federal government. The agreements resolve allegations that the company
overcharged state Medicaid programs for these drugs.

Corbett said that federal law requires drug companies to provide various Medicaid programs
with the "best price" available for their products. Drug companies are also required to report
various discounts that may lower the "best price" of their products. According to federal
lawsuits filed in Pennsylvania, Nevada and Louisiana, Merck failed to disclose generous drug
price discounts offered to various hospitals as part of sales promotions.

Corbett said the settlement agreements call for a payment of $5,051,686 to Pennsylvania
involving state Medicaid overpayments for Pepcid, which is used to treat heartburn and
stomach ulcers, along with $3,532,923 involving state Medicaid overpayments for Zocor, a
cholesterol-reducing drug, and Vioxx, a pain relieving medication.

"This is a significant recovery for Pennsylvania's Medicaid program," Corbett said. "This case
should also send a clear message to other drug companies that we do not tolerate efforts to
avoid providing the 'best price' to state and federal government programs."

Corbett said that in addition to the financial recovery for Pennsylvania and other states, Merck
has entered into a Corporate Integrity Agreement with the U.S. Department of Health and
Human Services. The agreement will include provisions to ensure that Merck will market, sell

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and promote its products in accordance with all federal health care program requirements.
Merck did, however, begin voluntary compliance initiatives associated with their sales and
marketing activities prior to learning of the government's investigation of the conduct
associated with these settlements.

The National Association of Medicaid Fraud Control Units conducted the settlement
negotiations on behalf of the states, with representatives of the Nevada, Illinois, Delaware and
Massachusetts Medicaid Fraud Control Units leading the effort.


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