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 TABLE OF CONTENTS
1. ABSTRACT
2. INTRODUCTION
3. MERCK, INC
4. THEN AND NOW
5. STAKEHOLDERS
6. VISION & MISSION
7. FDA
8. POLITICAL CONTRIBUTION
9. BLOCKBUSTER MODEL
10.RISE TO FAME
11.DTC ADVERTISING
12.SAFETY WARNING
13.WHAT HAPPENED
14.QUESTIONS
 ABSTRACT
This case relates to the pharmaceutical industry and is

about Mercks recalled product Vioxx. The product was very

successful in sales, but very harmful to the consumer. The

influence that the pharmaceutical industry had on capital

hill influenced the FDAs decision to look the other way. Our

question is, should there have been further action on those

responsible for the deaths and damages done to the

consumers?
INTRODUCTION
 MERCK, INC.

We try never to forget that medicine is for the

people. It is not for profits. The Profits follow, and if

we have remembered that they never fail to appear.

The better we have remembered that, the larger they

have been

- George W. Merck
 THEN & NOW
R AY M O N D G I L M A RT I N KENNETH FRAZIER
2005 CEO 2011-PRESENT CEO
 STAKEHOLDERS
Patients and Communities
Families Environmental
Doctors and stakeholders
scientist Employees
Payers Suppliers and
Government business
regulators partners
Shareholders Industry
associations
Issue experts
 VISION & MISSION
We make a difference in M I SS I O N
V I Slives
the I O N of
S people
TAT E M E N T S TAT E M E N T
To provide innovative,
globally through our
distinctive products and
innovative medicines,
services that save and
vaccines, and consumer
improve lives and satisfy
health and animal
customer needs, to be
products. We aspire to
recognized as a great
be the best healthcare
place to work, and to
company in the world
provide investors with a
and are dedicated to
superior rate of return.
providing leading
innovations and
solutions for tomorrow.
 FDA
The Food and Drug Administration (FDA) is a government agency that
was established in 1906 with the passage of the federal food and drugs
act.
The agency is currently separated into five centers which oversee a
majority of the organizations obligations involving:
Food
Drugs
Cosmetics
Animal food
Dietary supplements
Medical devices
Biological goods
Blood products
In 1992, Congress passed the prescription Drug User Fee Act (PDUFA)
that required the pharmaceutical companies to pay fees to review new
medicines.
Election Total Contributi Contributi Soft % to
Cycle Contributio ons From ons from Money Republica
n Indivi. PACs Contributi ns
ons
2006 $5,187,393 $1,753,159 $3,434,23 N/A 70%
4
2004 $18,181,045 $8,445,485 $9,735,56 N/A 66%
0
2002 $29,441,951 $3,332,040 $6,957,38 $19,152,52 74%
2 9
2000 $26,688,292 $5,660,457 $5,649,91 $15,377,92 69%
3 2
1998 $13,169,694 $2,673,845 $4,107,06 $6,388,781 64%
8
1996 $13,754,796 $3,413,516 $3,584,21 $6,757,063 66%
7
1994 $7,706,303 $1,935,150 $3,477,14 $2,294,007 56%
6
1992 $7,924,262 $2,389,370 $3,205,01 $2,329,878 56%
4
1990 $3,237,592 $771,621 $2,465,97 N/A 54%
1
 BLOCKBUSTER MODEL
In the 1990s, 80 percent of growth for big
pharmaceutical firms comes from the blockbuster
drugs.

Ideally, a Blockbuster drug is a medicine that could

control chronic but nonfatal conditions that afflicted
large amounts of people with health insurance, which
would include medicines for allergies, cholesterol,
arthritis, etc.

In 2003, Merck spent $422 million to market Vioxx to

doctors and hospitals.
 DTC ADVERTISING
In 1997 , The FDA for the first time allowed drug companies advertise
directly to consumers.

The took advantage of the opportunity by placing ads for Drugs like a
Viagra and Nexium in different media outlets.

In 2004, The Industry spent over $4 billion on such DTC Marketing.

Merck spent more than $500 million on advertising on Vioxx.

It is criticized by some because it put pressure on doctors to prescribe

drugs that might not be best for the patient.
 RISE TO FAME
Vioxx, which is the drug at the center of Mercks legal woes,
was known as a selective COX-2 Inhibitor.

In May of 1999, The FDA finally approved Vioxx for the

treatment of osteoarthritis, acute pain in adults and
menstrual symptoms and it was approved later for
rheumatoid arthritis.

Vioxx became exactly what Merck had hoped: a blockbuster.

 SAFETY WARNING
Doubts about Vioxx from their own scientists

VIGOR Study 5 times more likely to have a heart attack

than Aleve

Kaiser/Permanente Study 3 times more likely to have a

heart problem than Pfizers Celebrex

APPROVe Study Twice the risk of having a heart attack

than a Placebo Pill

 WHAT HAPPENED? THE RECALL
HAPPENED
The company's top research and marketing executives had a
meeting to consider whether to develop a study to directly
test a disturbing possibility: that the blockbuster drug
Vioxx, a painkiller, might pose a heart risk.

Privately, Merck was worried about this study. Dr. Edward

Scolnick, the companys research director said that
cardiovascular events were clearly there and that they
were a shame but he added there is always a hazard.

On September 27th, 2004, Dr. Peter S Kim. Had suggested to

Gilmartin that Vioxx be withdrawn from the market due to
the unacceptable risk. The CEO agreed and the following
day Gilmartin notified the board and the company had
contacted the FDA.
QUESTIONS, COMMENTS, CONCERNS?