Merck & Co Inc is funding the testing of lower dosages of its controversial cattle growth drug Zilmax, in a move that livestock experts say is crucial if the company is to resume sales of the product to the U.S. beef industry.

Nearly 18 months after Merck pulled the drug from the U.S. and Canadian markets after videos and photographs surfaced showing Zilmax-fed cattle turning up in a distressed state, either lame or with hooves missing at slaughterhouses, scientists at Texas Tech University are testing beef carcasses taken from cattle fed different concentrations of Zilmax.

The Merck-funded field study and lab work, which have not previously been reported, are designed to test Zilmax at its currently approved dosage of 6.8 grams per ton of feed for a 20-day period prior to slaughter, as well as dosages at about 60 percent and nearly 80 percent of that level, according to the title of the study. At the time Merck pulled Zilmax off the market, it had only one dosage level approved by the U.S. Food and Drug Administration.

Merck awarded $1.85 million to the Texas Tech team in October to conduct the research, the university mentioned at the time in a newsletter that got little attention outside of the school. The research is ongoing and the specific time frame of the study was not clear.

"This study is an example of the company's ongoing research efforts to provide additional data on the use of Zilmax," the company said in a statement to Reuters.

Merck, which says it still sells Zilmax in Mexico and South Africa, declined to comment on why it was testing these particular levels or whether it was collecting data to submit to the FDA. Merck also declined to say how many cattle are being fed Zilmax as part of the tests, or where the animals are being raised or slaughtered. It declined to give any further details.

An FDA spokeswoman declined to comment on the study, citing confidentiality regarding drug applications.

Texas Tech did not respond to requests for comment.

In November, federal regulators approved changes proposed by the company in the way the drug is administered. The company has also been working with cattle feed lot operators on how best to administer the drug.

"It looks to me like they're doing studies to determine if the lower dosages are efficacious in improving feed efficiency, growth rate and carcass leanness," said David Anderson, former head of swine research at Elanco Animal Health, a unit of Merck rival Eli Lily & Co, when Reuters told him about the study.

A similar product called Optaflexx, made by Elanco "has captured the market," said Arizona cattle rancher Harvey Dietrich, co-founder of advocacy group Beef Additive Alert, which is critical of growth-promotants such as Zilmax. "Merck wants their market share back," he added.

At the time the videos of the distressed cattle surfaced in 2013, some veterinarians argued that a key problem was that the drug, at its approved dosage, was too potent for some animals.  

The drug company does not need federal approval to return Zilmax to the market. But all four of the nation's largest beef packers and many meat producers have told Reuters they won't accept Zilmax until Merck can scientifically prove the drug doesn't cause the animal welfare issues seen in the past.

One option, say industry experts, would be for Merck to show the FDA that Zilmax is effective and safe at helping cattle gain weight at lower dosages, and petition the agency to alter the product's usage label.

The multi-site study that Merck is funding could provide the data needed to make such a petition, according to industry experts. Current labeling covers both dosage and details about its effectiveness on cattle.   

Major meat packers like Cargill Inc [CARG.UL] and Tyson Foods Inc say they are not processing any meat from Merck's study or slaughtering cattle fed with Zilmax. Spokesmen for Cargill, Tyson, National Beef Packing Co [NBEEF.UL] and JBS USA [JBS.UL] said their companies were not participating in the study.