Merck, the Fda, and the Vioxx Recall

In: Business and Management

Submitted By rmann7
Words 314
Pages 2
Merck, the FDA, and the Vioxx Recall

1. Do you believe that Merck acted in a socially responsible and ethical manner with regard to Vioxx? Why or Why not? In your answer, please address the company’s drug development and testing, marketing and advertising, relationships with government regulators and policymakers, and handling of the recall.

I do not believe that Merck made a socially responsible decision when Vioxx was introduced into the pharmaceutical market. Scientists that were involved in product development and testing knew that there were serious health risks that could be side effects of the medication- such as cardiovascular complications. If they considered the lives that could have potentially been and as we know now were affected, the medication could have been revamped with changes that would minimize these harmful side effects. During the development and testing phase for Vioxx – issues regarding the safety of the drug were questioned due to the many cases of heart attacks resulting from the medication (more so than Aleve and Celebrex). The advertising technique that was used was thru direct-to-consumer. This was new in the pharmaceutical industry as it was the first time they were allowed to advertise to consumers. They used an Olympic figure skater as the primary character within their commercials. Consumers then would request this medication, making doctors feel obliged to prescribe. The government and policymakers received large sums of money from the development company during the advertising phase and market introduction. When studies became public of Vioxx users being twice as susceptible to heart attacks, Dr. Kim recommended recalling the drugs due to the elevated risks for users as well as the lack of knowledge as to what was causing the heart attacks. There were mixed emotions for some stating that stronger warning labels should be used…...

Similar Documents

Merck, the Fda, and the Vioxx Recall

...Do you believe that Merck acted in a socially responsible and ethical manner with regard to Vioxx? Why or why not? In your answer, please address the company’s drug development and testing, marketing and advertising, relationships with government regulators and policymakers, and handling of the recall. No, Merck didn’t act in a corporate social responsibility in regards to Vioxx. Corporate social responsibility means that a corporation should act in a way that enhances society and its inhabitants and be held accountable for any of its actions that affect people, their communities, and their environment. Over a five year period from 1999 to 2004 over 139,000 people in the United States has had a heart attack or stroke as a result of taking Vioxx about 55,000 of them died. When a business is ranked on being highly successful they are mostly being ranked on profit not the amount of people they helped or cured. The pharmaceutical giant Merck that manufactured Vioxx was ranked number three of the world’s top pharmaceutical companies with sales of $30.78 billion dollars and profits of $7.8 billion. In the eight-page letter, the FDA says Merck engaged "in a promotional campaign for Vioxx that minimizes the potentially serious cardiovascular findings that were observed" in a clinical trial comparing Vioxx to naproxen, a less-expensive painkiller. "Your promotional campaign discounts the fact" that in the trial, "patients on Vioxx were observed to have a four to five-fold......

Words: 1129 - Pages: 5

Vioxx Decisions

...Vioxx Decisions – Were They Ethical? In the late 1990s, a pharmaceutical company called Merck was a leader in this industry. The pharmaceutical industry required millions of dollars and great amounts of time to be invested in research and development. From 1995 to 2001, Merck was successful in releasing 13 major drugs into the market. One of these drugs was one that would treat rheumatoid arthritis. The drug, Vioxx, acquired the approval of the Food and Drug Administration (FDA) in May 2009 (Cavusgil, 2007). Vioxx became one of the top five selling drugs in the market in the next five years. However, Merck pulled the drug from the market on September 30, 2004 due to increased observations of cardiac arrest and stroke in many consumers. Merck faced an ethical dilemma when it found increased observations of cardiovascular problems in patients. However, it took many years for the company to pull its top selling drugs from the market. The ethical issue, the interested parties and solutions will be addressed in the following paragraphs (Brooks & Dunn, 2012). Ethical Dilemma As in many industries, the pharmaceutical industry has great competition. Vioxx was competing successfully with Pfizer’s products, Celebrex and Bextra. However, Merck’s product was especially thriving because, unlike Celebrex and Bextra, Vioxx did not contain naproxen. This ingredient is harmful to the gastrointestinal system (Cavusgil, 2007). By 2003, Vioxx gained revenue for Merck that reached $2.5 billion...

Words: 1317 - Pages: 6

Merck: Recall of Vioxx

...Analysis #1 Tuesday, January 22, 2013 Matt Janes Merck & Company, Inc: The Recall of Vioxx Introduction Geroge W. Merck stated once stated, “We try never to forget that medicine is for the people. It is not for the profits. The profits follow. Initially, Vioxx was the blockbuster drug that Merck needed due to the upcoming Zocor patent cliff in 2006. With an estimated 27,785 heart attacks and sudden cardiac deaths that could have been avoided if Celebrex had been used instead of Vioxx, Merck faces the possibility of not only having to pay enormous civil and criminal penalties, but also losing the trust of patients. Many parties are partially culpable, but Merck faces the severe uphill battle of regaining a reputation that once served as a market differentiator; in the 1980’s, Merck was voted the “Most Admired Company in American Business” for seven consecutive years. A critical issue in this case is to analyze the events listed in the case and propose an alternate course of action that may help prevent future deaths from other pharmaceutical drugs while not prohibitively restricting innovative research that could potentially save lives if tested properly. Critical Points and Issues Merck was relying on the success of Vioxx due to Zocor’s expiring patent and the direct competition Vioxx was engaged in with Celebrex, which had a first mover advantage. While Celebrex was also a Cox-2 inhibitor, Vioxx was the only Cox-2 inhibitor proven to be beneficial for......

Words: 2144 - Pages: 9

Merck

...Introduction Merck was established in the U.S. in 1891, but its roots trace back to Friedrich Jacob Merck’s purchase of a German drug store in 1668. Today the company is a top tier global entity, a “research-driven” pharmaceutical company “dedicated to putting patients first.” Merck’s mission is to “provide society with superior products that improve the quality of life and satisfy customer needs, provide employees with meaningful work and investors with a superior rate of return.” As a long time player in the U.S. pharmaceutical industry, Merck has had extensive experience in assigning and dividing complex tasks among its many specialized departments. Specialization allows Merck to operate efficiently and bring new drugs to American patients. On May 20, 1999, the FDA approved Merck’s application to market Vioxx, a new arthritis pain-reliever. The effort to create a successful drug at Merck was no small task, not only did the company need to develop, test, and receive approval for a new product. It also needed to make sure the drug was successfully marketed to the right consumers. By the end of 1999, over 5 million prescriptions had been written for Vioxx and it had been launched in 47 countries. The Vioxx launch went particularly well, and Merck splashed its success across the front page of its Annual Report with the lead, “Vioxx: Our biggest, fastest and best launch ever.” New Vioxx sales came at an important time for Merck. The exclusive patents to four major drugs......

Words: 492 - Pages: 2

I Do Not Believe That Merck Made a Socially Responsible Decision When Vioxx Was Introduced Into the Pharmaceutical Market.

...I do not believe that Merck made a socially responsible decision when Vioxx was introduced into the pharmaceutical market. Scientists that were involved in product development and testing knew that there were serious health risks that could be side effects of the medication- such as cardiovascular complications. If they considered the lives that could have potentially been and as we know now were affected, the medication could have been revamped with changes that would minimize these harmful side effects. During the development and testing phase for Vioxx – issues regarding the safety of the drug were questioned due to the many cases of heart attacks resulting from the medication (more so than Aleve and Celebrex). The advertising technique that was used was thru direct-to-consumer. This was new in the pharmaceutical industry as it was the first time they were allowed to advertise to consumers. They used an Olympic figure skater as the primary character within their commercials. Consumers then would request this medication, making doctors feel obliged to prescribe. The government and policymakers received large sums of money from the development company during the advertising phase and market introduction. When studies became public of Vioxx users being twice as susceptible to heart attacks, Dr. Kim recommended recalling the drugs due to the elevated risks for users as well as the lack of knowledge as to what was causing the heart attacks. There were mixed emotions for some......

Words: 260 - Pages: 2

Merck 1

... Merck Josue Vazquez University of Phoenix Management - MGT/ 521 Dr. Hector Torres Perez February 19, 2014 Merck The history of Merck Company as one of the first pharmaceutical in the world dates all the way back to 1668 when Friedrich Jacob Merck acquired the Angel Pharmacy, which became the heart of Merck and is still owned by the Merck family today. In 1891 Merck in Germany became Merck KGAA or "German Merck" and a United States subsidiary called Merck & Co., Inc. was established in New Jersey. As a consequence of World War I, Merck lost its subsidiaries abroad in 1917, including its American subsidiary Merck & Co., which then became an independent U.S. company. But with the merger with Sharp &Dohme Inc. in 1953 Merck become the largest pharmaceutical producer in the United States. In 1987 Merck was named America’s most admired and most innovative company. In 2006 their vaccine against the Human Papiloma virus, Gardasil was approved by the FDA and is currently they only method of treatment against the HPV virus against the strands that can cause cervical cancer in women. They have also been responsible for the development of vaccines against measles and rubella virus. Merck Company employs an approximate of 51,000 employees in over 120 countries all over the world and owns 31 factories worldwide. It actively participates in charitable organizations, which since......

Words: 1148 - Pages: 5

Merck and Co

...9-201-023 R E V: M A R C H 25, 2003 RI CH A R D S. R U B A CK Merck & Company: Evaluating a Drug Licensing Opportunity Rich Kender, Vice President of Financial Evaluation & Analysis at Merck, was working with his team to decide whether his company should license Davanrik, a new drug with the potential to treat both depression and obesity. The small pharmaceutical concern that developed the drug, LAB Pharmaceuticals, lacked the resources to complete the lengthy approval process, manufacture the compound, and market the drug. LAB had approached Merck with an offer to license the compound. Under this agreement, Merck would be responsible for the approval of Davanrik, its manufacture, and its marketing. The company would pay LAB an initial fee, a royalty on all sales, and make additional payments as Davanrik completed each stage of the approval process. Merck In 2000, Merck & Co., Inc. was a global research-driven pharmaceutical company that discovers, develops, manufactures and markets a broad range of human and animal health products, directly and through its joint ventures, and provides pharmaceutical benefit management services (PBM) through Merck-Medco Managed Care. Since 1995, Merck had launched 15 new products including Vioxx™ for the treatment of osteoarthritis, Fosamax™ for the treatment of osteoporosis and Singulair™ for treating asthma. The Company earned $5.9 billion on 1999 sales1 of $32.7 billion, about a 20% increase from 1998. Exhibits 1 and 2 contain......

Words: 2375 - Pages: 10

Merck

...CASE 6-MERCK Problems The first problem is even before the drug was approved, some evidence cast doubt on the safety of Vioxx. The study found—as the company had expected—that Vioxx was easier on the stomach than naproxen. But it also found that the Vioxx group had nearly five times as many heart attacks. Some analysts criticized DTC advertising, saying that it put pressure on doctors to prescribe drugs that might not be best for the patient. Solutions Merck faced serious and terrible situation because its medicine caused patients’ deaths. According to the case, The Merck Inc.’s solution is that recalled all the Vioxx which cause the stock price decrease dramatically. But it is important to repair the company’s image and leave good impression to people. By apologizing to consumers through TV and taking responsible for the mistakes will help Merck Inc. retrieve their consumers. On the other hand, analyst argued that the methods DTC advertise their products are criticized. The reason is that analysts think that “when a patient comes in and wants something, there is a desire to serve them.” Because of the direct-to-consumer ad makes patients believe that all drugs are safe, it is not correct to leave such impression to consumers. Drugs are not safe at all, and doctor should examine all of them before recommending to patients. Recommendations I think the solution is a good symbol to help company’s development. As we all know, if they only cared about profit, not their......

Words: 454 - Pages: 2

Vioxx Case Analysis

...affected in the Merck Vioxx case would include investors or shareholders, employees, customers, suppliers, and distributors. Investors and employees would be considered the internal stakeholders while customers, suppliers, and distributors would be considered external stakeholders. The investors or shareholders are very important to Merck's success because they supply the funds for research and development through their investment in the company's stock. Without them, there really is no company. If the firm struggles, the investors are likely to lose money as well so they closely follow every decision Merck makes. Certain shareholders have the power to influence company decisions and help appoint members of power within the organization. A good example of investors with these powers would be the board of directors. The general employees within Merck effect the overall success of the firm through the decisions they make while on the job. Additionally, they are also affected by top management decisions that they can't control. If the CEO makes a poor choice that costs the company money, their jobs are at risk. The customers are very important because they are the ones buying the drug. In this case, customers are even more important because they are physically being affected by the product they are purchasing. The product needs to fill the customer's needs without harming them through adverse side effects. The customers would have enforceable claims on Merck......

Words: 633 - Pages: 3

Merck

...9-201-023 REV: MARCH 25, 2003 RICHARD S. RUBACK Merck & Company: Evaluating a Drug Licensing Opportunity Rich Kender, Vice President of Financial Evaluation & Analysis at Merck, was working with his team to decide whether his company should license Davanrik, a new drug with the potential to treat both depression and obesity. The small pharmaceutical concern that developed the drug, LAB Pharmaceuticals, lacked the resources to complete the lengthy approval process, manufacture the compound, and market the drug. LAB had approached Merck with an offer to license the compound. Under this agreement, Merck would be responsible for the approval of Davanrik, its manufacture, and its marketing. The company would pay LAB an initial fee, a royalty on all sales, and make additional payments as Davanrik completed each stage of the approval process. Merck In 2000, Merck & Co., Inc. was a global research-driven pharmaceutical company that discovers, develops, manufactures and markets a broad range of human and animal health products, directly and through its joint ventures, and provides pharmaceutical benefit management services (PBM) through Merck-Medco Managed Care. Since 1995, Merck had launched 15 new products including Vioxx™ for the treatment of osteoarthritis, Fosamax™ for the treatment of osteoporosis and Singulair™ for treating asthma. The Company earned $5.9 billion on 1999 sales1 of $32.7 billion, about a 20% increase from 1998. Exhibits 1 and 2 contain Merck’s Income...

Words: 2360 - Pages: 10

Vioxx Recall

...Abstract The following text examines the recall of the drug Vioxx and the pharmaceutical industry’s responsibilities when it comes to ethical testing and distribution of consumer medicines. The role of the Federal Drug Administration is examined. The text also contemplates the actions that Merck, the maker of Vioxx, took during the product’s recall and how we can improve the current drug testing system to protect consumers. INTRODUCTION Merck, one of the biggest pharmaceutical companies in the world, created Vioxx, a once best-selling painkiller. In 2004, the company learned that its drug increased the risk of stroke and heart attack. After a few different studies, Merck finally gave in and recalled the product. The company had to face troubling questions and allegations that Vioxx had caused many deaths even though it wasn’t proven to be completely safe. Do you believe that Merck acted in a socially responsible and ethical manner with regard to Vioxx? Why or why not? In your answer, please address the company’s drug development and testing, marketing and advertising, relationships with government regulators and policy makers, and handling of the recall. I don’t think that Vioxx acted in a socially responsible and ethical manner with regard to Vioxx. Even before the drug was approved and released into the market, there was evidence that Vioxx wasn’t 100% safe. Dr. Alise Reicin, one of the scientists that worked for Merck at the time in 1997, stated in an e-mail......

Words: 954 - Pages: 4

Merck and Vioxx Drug Recall

... Case Study: Merck and the Vioxx Recall Kelvin Gabel Benedictine University Case Study: Merck and the Vioxx Recall According to Lawrence and Weber (2014), former Merck CEO George W. Merck implied a corporate vision of social responsibility for Merck & Co., Inc. (Merck) when he stated in 1950 that medicine was for the people and that loyalty to that concept would lead to greater profits. On the surface, it appears Merck has historically lived its declared mission of putting people first. This is demonstrated by the company forfeiting patent and profits from the antibiotic streptomycin and the drug Mectizan (Lawrence, 2014). Merck was well rewarded for its people first philosophy. Though it was ranked fifth in asset and market value, it ranked first in profits. Additionally the company had a stellar reputation of being perceived as the most ethical and socially responsible of the major drug companies (Lawrence, 2014). Today Merck Pharmaceutical’s mission statement is “to discover, develop and provide innovative products and services that save and improve lives around the world (Merck, 2015).” Reading Merck’s current mission statement lacks both the compassion of placing people first and the implied social responsibility of Mr. Merck’s statement in 1950. To be contextually correct historically in forming a view of Merck and the Vioxx recall issue, I sought to find a corporate mission statement from the period of the recall which was in 2006. According to......

Words: 1294 - Pages: 6

Merck

...3. Should Merck bid to license Davanrik? How much should they pay? Our team will recommend Merck bid to license Davanrik given the following reasons: 1. One of the major advantage of the company is its patents of new drugs. According to the case, we know that four drugs will expire by 2002 and those drugs are regarded as the so-called star-products of the company. According to the company’s financial statement, we learn that Merck’s net income margin has declined from 19.52% to 18% and the research and development cost has been decreased in terms of percentage of sales. So we believe that Merck should increase its expenditure on research. On the expiration of the drugs, the sales will decreased dramatically as competition emerges. So in order to maintain its competition edge, the company need to develop new drugs. 2. Even though the company used to develop new compounds primarily through internal research, we believe that working with LAB Pharmaceuticals will give Merck a synergy effect to obtain a better result. Given LAB Pharmaceuticals’ performance in the past, we believe that Merck’s plentiful experience will sure to make to most of the pre-clinical development of Davanrik. 3. According to the balance sheet, we can learn that Merck has sufficient cash to support the licensing process and we believe the company has the ability to absorb the potential loss on failure. So the risk is tolerable for Merck. So we will suggest Merck bid to license Davanrik. As for the bid...

Words: 545 - Pages: 3

1. on Balance, Do You Think Merck Is an Ethical and Socially Responsible Company? Why or Why Not?

...I believe neither Merck nor Pfizer acted ethically or socially responsible during the Vioxx disaster. Evidence suggests that Merck might have knows about the harmful side effects of Vioxx and yet they hesitated for over 3 years to recall the drug. There was also an allegation that the company had manipulated and covered-up the results of the medical trials in their favor. An ethical thing to do would be to simultaneously recall the drug as well as inform the public about the dangers of using Vioxx. Instead Merck not only continued to produce and sell the drug, they had also spent hundreds of millions of dollars a year in marketing, partly to counteract any questions raised. According to The Wall Street Journal Merck’s “training document listed potential tough questions about Vioxx and said in capital letters, "DODGE!" , meaning that the company advised marketers to avoid direct answers on the health consequences of the drug. The article even mentions that many doctors and medical professors who raised questions about the safety of Vioxx were being pressured and intimidated by Merck. There is no doubt that all this behavior was deliberate and illegal. A company doing this kind of practices cannot call itself ethical. After the Vioxx scandal, Pfizer - the producer of Celebrex and Bextra (drugs with a very similar chemical composition to Vioxx and its biggest competitors) was in a perfect spot to immediately recall it’s medicine from the market and therefore prove to the public...

Words: 517 - Pages: 3

The Fda

...One of the oldest U.S. consumer protection agencies, the Food and Drug Administration (FDA) protects the public from unsafe foods, drugs, medical devices, cosmetics, and other potential hazards. As part of the department of health and human services, the FDA annually regulates over $1 trillion worth of products, which account for one-fourth of all consumer spending in the United States. It also protects the rights and safety of patients in clinical trials of new medical products, monitors the promotional activities of drug and device manufacturers, regulates the labeling of all packaged foods, and monitors the safety of the nation's blood supply. To ensure compliance with its regulations, the FDA employs over 1,000 investigators and inspectors who visit over 15,000 food-processing, drug-manufacturing, and other facilities each year. If it finds violations of law, the FDA first encourages an offending company to voluntarily correct the problem or to recall a faulty product from the market. If the firm does not voluntarily comply with the law, the FDA may take it to court and seek criminal penalties against it. The FDA may also seize faulty products, order product recalls, seek injunctive relief, impose fines, and take other types of enforcement action. Each year, the FDA declares about 3,000 products and 30,000 import shipments to be unacceptable in various ways. The FDA employs over 2,000 scientists—including 900 chemists and 300 microbiologists—who provide the......

Words: 3299 - Pages: 14