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Field Reports

1 Jul, 2008 By: Thomas Haire, Jacqueline Renfrow Response


Merck Pays $58 Million in Vioxx Ad Settlement


By Jacqueline Renfrow (

WHITEHOUSE STATION, N.J. — Merck & Co. has agreed to pay $58 million as part of a multi-state settlement for allegations that its direct-to-consumer (DTC) ads for the painkiller Vioxx deceptively played down the drug's health risks.

The civil settlement involved Attorneys General from 29 states and the District of Columbia and followed investigations of consumer protection laws related to the DTC advertising of Vioxx. In April, Merck announced it had taken a pre-tax charge in the first quarter of $55 million, anticipating the settlement.

"Merck remains committed to communications that help patients and their physicians choose medicines based on accurate, fair and balanced information," says Bruce Kuhlik, executive vice president and general counsel of Merck. "Today's agreement enables Merck to put this matter behind us and focus on what Merck does best — developing new medicines."

Part of the agreement requires Merck to submit all new TV commercials for its drugs to the Food and Drug Administration (FDA) for review — over the next seven years — and follow any agency recommendations for changes before airing them. In addition, for the next 10 years, Merck must comply with any FDA recommendations to delay TV advertising for newly approved pain medications.


Advertising Expenditures Increase 0.6 Percent in First Quarter


By Jacqueline Renfrow (

NEW YORK — Total measured advertising expenditures in first-quarter 2008 increased by 0.6 percent compared with the same period in 2007, according to a study by TNS Media Intelligence.


"Enduring concerns about economic conditions and consumer spending behavior continued to cast a pall over the advertising market during the first quarter," says Jon Swallen, senior vice president of research at TNS Media Intelligence. "After a hopeful start to the year, the pace of ad spending slowed perceptibly during March, and early figures from the second quarter indicated little immediate or sustained improvement in the core ad economy."

The top 10 advertisers spent about $4.4 billion in 1Q 2008 — a gain of 1.6 percent. Spending on advertising for the top 10 ad categories fell 1.8 percent to $17.4 billion. The top category remained financial services, increasing spending by 0.3 percent to $2.2 billion, despite cutbacks from banking, credit card and lending companies.

Although Internet display advertising spending did not reach the double-digit growth rates of 2007, it did gain 8.5 percent. Cable TV was up 4.1 percent and outdoor was up 2.5 percent.

Network TV expenditures increased 0.8 percent, its best quarterly performance in two full years. Consumer magazine spending was up 0.2 percent, as higher budgets from food advertisers were neutralized by reduced commitments from direct response and pharmaceutical marketers.

Those categories slipping in expenditure included spot TV, down 2.4 percent, and newspaper, down 5.2 percent.

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