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BONUS CASE 4-4
Merck and Ethics (Part II)
In 2003, pharmaceutical pioneer Merck had a blockbuster drug, Vioxx, a powerful pain
reliever. Discovered in a Merck lab in 1994, the drug was one of a new class of painkillers called
COX-2 inhibitors, which reduce pain and inflammation without the side effects—ulcers and
gastrointestinal bleeding—that painkillers such as ibuprofen can cause. Vioxx worked beautifully
in clinical trials with arthritis patients and was approved by the FDA in 1999. Edward Scolnick,
President of Merck Research Labs, even let it be known that he was taking Vioxx himself for
back pain.
But in September 2004, Merck removed Vioxx from the market after a study found a
higher rate of heart attacks and strokes in patients taking the drug. Vioxx, on the market for five
years, had been marketed in 80 countries with worldwide sales totaling $2.5 billion in 2003.
When it was pulled from the market, 2 million Americans were taking Vioxx.
The pharmaceutical industry was astonished that the well-respected company had marketed
a drug known to cause higher rates of cardiac events. Almost twenty years earlier Merck established
a reputation for social responsibility by donating a treatment for river blindness to patients in
developing countries.
Still more shocking was the admission that as far back as 1998 Merck knew the drug had
problems. Even before FDA approval, researchers outside Merck had found evidence that it
might increase the risk of a heart attack. In 1998 a group at the University of Pennsylvania
discovered that COX-2 inhibitors interfere with enzymes thought to ward off cardiovascular
disease. A 2001 study testing the drug against nonprescription naproxen showed that Vioxx was
safer than naproxen, but it also found that Vioxx doubled the risk of cardiovascular problems.
Merck put a positive spin on the data, highlighting the lower risk of side effects, not the cardiac
complications.
By April 2002, the FDA mandated that Merck note a possible link to heart attacks and
strokes on Vioxx’s label. At the time, Merck was spending more than $100 million a year on
direct-to-consumer advertising building the “blockbuster” status of the drug.
Merck continued to minimize the problems up until a month before withdrawing the
drug. The death blow to the drug was the results of APPROVe, a database analysis of 1.4 million
patients. Ironically, this study was designed to test whether Vioxx reduced the risk of colon
polyps. Instead, it showed that patients who took the drug for at least 18 months had double the
risk of heart attacks and strokes as those who took the placebo. For a few weeks, Merck focused
on the fact that it took 18 months for Vioxx to cause problems. However, Merck researchers
continued crunching the data and concluded that the safety window might be as little as three
months.
The researchers who told Merck CEO Ray Gilmartin about the APPROVe results pointed
out that the company was under no obligation to recall the drug. Merck could take the data to the
FDA and have the labeling changed. In fact, the majority of outside clinicians that Merck
consulted in the first few days suggested it do just that, since there were millions of people who
were benefiting from Vioxx and not getting heart attacks. But Gilmartin decided that withdrawing
the drug was the responsible thing to do.
Since the drug was withdrawn, investigators have linked Vioxx to more than 27,000 heart
attacks or sudden cardiac deaths nationwide from the time it came on the market in 1999 through
2003. Over 11,000 lawsuits have been filed against Merck.i
DISCUSSION QUESTIONS FOR BONUS CASE 4-4
1.
2.
3.
If Merck can donate $50 million in free doses of Ivermectin, what does that say about the
amount of revenue the company generates in the drug research and distribution industry?
In the case of Vioxx, known serious side affects were being reported and yet the company
was slow to suspend or remove the drug from the market. What does this say about the
approval process of drugs to the market and why companies would be reluctant to give up
the revenue stream for such a common used drug as Vioxx?
Merck finally pulls Vioxx from the market and has 11,000 lawsuits to handle. How
would you feel if you were the company president and you were a known name and face
of a company that was responsible for the stroke or hear attack for a past user of the
drug?
ANSWERS TO DISCUSSION QUESTIONS FOR BONUS CASE 4-4
1.
If Merck can donate $50 million in free doses of Ivermectin, what does that say about the
amount of revenue the company generates in the drug research and distribution industry?
Drug companies are some of the highest revenue producers and very profitable if they get
their drugs into mainstream use without any major problems. In the case of Merck, it appears to
be one of these types of drug companies. However, the process of research and FDA approval can
be tedious and costly with no guarantees that the products are going to be successes on the
market.
2.
In the case of Vioxx, known serious side affects where being reported and yet the
company was slow to suspend or remove the drug from the market. What does this say
about the approval process of drugs to the market and why companies would be reluctant
to give up the revenue stream for a a common used drug as Vioxx?
Market success, as already mentioned, is a conclusion to a commitment of research and
numerous expenses for the low percentage that they will have a successful drug reach the
marketplace. As a result, getting to this level is a huge potential payoff for the company and
therefore a difficult reality to remove this product from the most sought after objective of the
company; market approval and market success.
3.
Merck finally pulls Vioxx from the market and has 11,000 lawsuits to handle. How would
you feel if you were the company president and you were a known name and face of a
company that was responsible for the stroke or hear attack for a past user of the drug?
The president of Merck works at such a high level and has such responsibilities,
especially to the stockholders of the company, that his business training and business acumen
allows him or her to handle these types of situations. The average person would be too emotional
about a person responding to a drug with a stroke or heart attack and therefore would not be
equipped for such dealings as compared to the seasoned company president or CEO.
Sources: Rita Rubin, “How Did Vioxx Debacle Happen?” USA Today, October 12, 2004; John Simons
and David Stipp, “Will Merck Survive Vioxx?” Fortune, October 18, 2004; Matthew Herper, “The Vioxx
Maelstrom,” Forbes, May 22, 2006; and “Vioxx Risk Seen With Short-Term Use—Report,” Reuters, May
17, 2006.
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