Case Study: Merck & Company: the Vioxx Recall

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Running head: CASE STUDY: MERCK & COMPANY: THE VIOXX RECALL

Merck & Company: The Vioxx Recall
Albert Balogun
California Baptist University
BUS 520A: Managerial Ethics
Jim Bishop, PhD
June 30, 2010

Merck & Company: The Vioxx Recall The issues involved in Merck, a pharmaceutical manufacturing company’s recall of one its products, Vioxx, is the effect of direct-to-consumer (DTC) advertising of prescription drug on the society public health, the impact of it on the doctor –patient relationship and other ethical considerations. The purpose of this paper is to make an exposition of issues that the recall case entailed including the ethical issues that were involved, and the propriety of DTC advertising method. The legal implications of the recall and the effect of an enactment of a law by the Congress to prevent the use of DTC method of advertising will also be examined. The Beginning of Merck Troubles A number of reasons could be adduced for Merck’s troubles; from a very reputable pharmaceutical company to one that had its major brand withdrawn from the market with considerable adverse financial implications. Apart from the role of direct-to-consumer (DTC) pharmaceutical advertising and its impact on the company’s decision-making process during the period preceding and leading to the recall of Vioxx which will be the central focus of this paper, other reasons exist as well. These include the competitiveness of very high magnitude that existed in the pharmaceutical industry in the 1990s and the dilemma that Merck faced as a result of a number of its patents that were due to expire. These patents were mostly on the company’s most profitable drug lines (Green, 2007). With declining fortune, Merck found DTC irresistible and relied on it heavily to shore up its market share and to remain competitive. This was the case particularly in the aggressive marketing of Vioxx which evidently was discovered to be dangerous to the consumers but which the company ignored as will be expatiated later in this paper. Direct-to Consumer Advertising Direct-to-consumer advertising of pharmaceutical drugs which involves direct promotion of prescription drugs to patients and physicians has continued to generate a lot of controversies with regard to its impact on the public health and on the relationships that exist between doctors and their patients. The relaxation of the rule governing the direct-to-consumer (DTC) advertising in 1997 by the U.S. Food and Drug Administration (FDA) paved the way for intensification of such mode of advertising by the pharmaceutical companies. The relaxed rule led to widespread use of television to advertise prescription drugs with commensurate big spending by the drug companies (Beauchamp et al, 2008). The Vioxx Recall Story Vioxx was discovered in 1994 by Merck to be among the new class of painkillers known as COX-2 inhibitors. COX-2 inhibitors are the newest form of nonsteroidal anti-inflammatory drugs (NSAIDs) and Vioxx, as one of them, was developed to overcome the stomach irritation and gastric bleeding associated with older NSAIDs with COX-1 and Cox-2 inhibitors, which include aspirin, ibuprofen, and naproxen to treat people who are in need of long-term pain relief. The COX-2 medication was effective for treatment of arthritis and other pains without users being exposed to stomach damage by naproxen. But the market for it was insignificant. Merck, looking for ways to entrench its market leadership threatened by impending loss of patent, relied heavily on Vioxx to capture the painkiller drug market with which it hoped to shore up its profile and revenue. However, since Vioxx is only COX-2 inhibitors, Merck was concerned about its market strategy if patients have no benefit of cardiovascular derivable...
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