Merck has agreed to pay a $950m fine to settle criminal and civil charges that it misrepresented the safety of its anti-inflammatory drug Vioxx.
Under civil settlement agreements signed with the US and individually with 42 states, Merck will pay a $628.4m civil settlement to resolve allegations that it promoted the drug for treating rheumatoid arthritis before it had been approved for that indication by the US Food and Drug Administration.
The Justice Department also alleged that Vioxx, the generic name of which is rofecoxib, has been linked to the increased risk of heart attacks and strokes.
Merck pled guilty to a misdemeanour charge and will pay an additional $321.6m for introducing the misbranded drug into interstate commerce.
The charge closes a seven-year investigation in to the drug, which Merck pulled off shelves in 2004.
In a statement released on Tuesday, Merck executive vice-president Bruce Kuhlik said that the settlement does not mean the company admits liability or wrongdoing.
"We believe that Merck acted responsibly and in good faith in connection with the conduct at issue in these civil settlement agreements, including activities concerning the safety profile of Vioxx," he said.