Merc & Vioxx Case

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Merck and the Recall of Vioxx

Florence N. Wandera
MGT 600 – Corporate Responsibility & Bus Law

Merck and the Recall of Vioxx
Case Summary
Merck & Co. Inc. is a global research-driven pharmaceutical company that develops, manufactures and markets a broad range of human health products. One such product is Vioxx, developed in 1994 and approved on May 21, 1999 by the United States Food and Drug Administration (FDA) for the treatment of pain, inflammation, and stiffness caused by arthritis. The drug was also later approved for use in the treatment of rheumatoid arthritis in both children and adults. The product was promoted aggressively by Merck and had emerged as one of the best selling drugs for the company within a year of its launch. However, medical experts raised doubts about the cardiovascular risks associated with Vioxx's long-term usage. In the initial years, Merck disagreed with the various medical studies that indicated cardiovascular risks until its own internal study indicated the risk. Finally, in September 2004, Vioxx was recalled from the market. This decision to recall the drug was expected to cost Merck $2.5 billion in revenues as it was the second largest selling drug next to Pfizer’s Celebrex in the category known as Cyclooxygenase (COX-2) inhibitors. According to Merck’s estimates, between May 1999, and August 2004, about 105 million prescriptions were written for Vioxx in the US alone. The drug had been taken by 84 million people worldwide since its introduction and at the time of the recall, 2 million people were using it. Soon after the recall announcement, Merck’s share price fell by 27% from $45.07 to $33 per share, wiping out about $28 billion in market value. The case highlights the ethical issues involved in Vioxx's controversy and examines the way Merck handled the entire issue.

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The Problem
The main problem I can see in this case is the fact that Merck disregarded earlier signs about Vioxx’s potential risks, hence the subsequent events that led to the loss of the company’s reputation as the premier firm in the pharmaceutical industry. The Causes

The first sign of trouble really came when according to the reading, an unpublished 1998 Merck clinical trial called “study 090,” which involved 978 patients, showed that serious cardiovascular events, including heart attack and stroke, occurred about six times more often in patients taking Vioxx than in patient taking another arthritis drug or a placebo. But Merck dismissed these findings saying the study was too small for any significant conclusions to be drawn. Then came the big study hinting at real trouble, VIGOR, in which over 8000 patients were enrolled in Merck’s post-approval study of upper gastrointestinal (UGI) toxicity of Vioxx. It was a double blind, randomized trial comparing the occurrence of gastrointestinal toxicity of Vioxx and naproxen (Aleve, another non-steroidal anti-inflammatory) in arthritis patients. The trial showed that the risk of “important” UGI adverse events was significantly lower in the Vioxx group compared to the naproxen group. Further analysis, however, showed that the risk of heart attack was four times higher than that of the naproxen group. According to the reading, these results were not a complete surprise to Merck. It was something the company had known would show up one day. In some of the e-mails exchanged, Merck’s chief of research, Ed Scolnick was quoted saying that the cardiovascular events “are clearly there. It is a shame but it is a low incidence and it is mechanism based as we worried it was,” (Sulkowski). I can understand that this is a business, and these pharmaceutical firms are in to make money, but at the same time it is human life that these companies are really toying around with, basically. I was very disturbed...
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