Case Study: Merck & Company: the Vioxx Recall

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could be adduced for Merck’s troubles; from a ve ry reputable pharmaceutical company to one that had its major brand withdrawn from the market with considerable adverse financial implications.Apart from the role of direct-to-consumer (DTC) pharmaceutical advertising and its impact on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 (N SAIDs) 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 from COX-1 (Phua & Achike, 2007).The belief through trials in Merck was that while Vioxx provides guarantee against stomach damage, there is no increased risk to the heart. In 1998 wh en Merck completed the development of Vioxx and submitted application for approval to FDA and before it finally launched Vioxx in 1999, there was considerable positive change in the company’s fortune. It became the number one pharmaceutical company in the world and earned $5. 24 billion in net revenue.During this period, it was discovered by some researchers that COX-2 inhibitors such as Vioxx would interfere with enzymes that very likely to prevent cardiovascular disease. The researchers’ study was opposed by Merck claiming that the study lacked conclusive evidence (Beauchamp et al, 2008). In 1999 prior to the launch of Vioxx into the market, Merck commissioned Vioxx Gastrointestinal Outcomes Research (VIGOR) trial with the aim of proving that its drug is less risky than the older NSAIDS.Excluding patients with high risk of heart problem, the study gave some patients high doses of Vioxx and precluded them from taking aspirin. Next to this was the approval of Vioxx for marketing to the public by FDA. As opposed to the normal two-year review period for other companies, it took only six months for FDA to review Vioxx for Merck made possible by a special relationship and money inducement. Merck used DTC to successfully market Vioxx to the public (Beauchamp et al, 2008). In 2000, Merck wanted to prove whether Vioxx can reduce colon polyps.It decided to sponsor a study code named ‘APPROVe’ which is Adenomatous Polyp Prevention on Vioxx. To give effect and credibility to the study, it was controlled and it compared Vioxx with a placebo rather than another drug. It was at this time that the result of VIGOR trial was published internally. The outcome was that even though Vioxx patients showed less stomach damage, there is more blood clot problems than drugs in the naproxen group with five times higher risk of heart attack.Even when Merck’s head of research admitted in internal email confirmed the fear about cardiovascular and opting f or more data before results were made public, it would appear as Merck deliberately suppressed the results of its own study maintaining that all was well by relying only on the favorable aspects of the study. It would appear that the company caused some academics that it was funding to issue a paper based on the VIGOR study and published ‘The New England Journal of Medicine’ to highlight Vioxx benefits to the digestive system and the cardiac problems but to maintain that patients are not at risk of heart problems.The VIGOR results continue to hunt Merck as FDA would later require a label of warning of possible link to cardiovascular problems. Surprisingly, Merck would ignore the recommendation only to be forced to include a warning label that highlight the fewer stomach problems but to expressly include a warning about possibly more heart attacks and strokes (Beauchamp et al, 2008). Merck became more aggressive spending over $100 million on DTC advertising of Vioxx. By August, 2004 when an FDA researcher presented a comprehensive analysis of data collected over 1. million users of Vioxx which showed that they were more likely to suffer heart attack than other COX-2 inhibitors and older NSAIDS, Merck still maintained its stand that Vioxx was safe from cardiovascular problem. It would only take the APPROVe study which was stopped at the behest of the researchers for Merck to finally agree that, according to APPROVe finding, Vioxx exposes users to demonstrably higher incidence of heart attack after 18 months of regular use (Phua & Achike, 2007).Merck finally halted the sales of Vioxx on September 30, 2004 after it had expended over $500 million on DTC advertising of Vioxx raking in over $2. 5 billion in sales revenues in a year. The Ethical Considerations Clearly, the objective to regain and maintain leadership position in the pharmaceutical industry was paramount to Merck than getting a safe product to the market. The huge market share and profits t hat go with such position propelled Merck to overlook essential findings that would have revealed the heart attack risks associated with Vioxx at research and development stages.At introduction stage, both Merck and FDA acted unethically by speeding up the review process. In a situation whereby FDA as the regulator is on the pay of the pharmaceutical industry, it can be expected that the rules and the procedures would be compromised. A pharmaceutical company should have no control over the information that is disclosed about its products because patients rely on the expertise of the physicians to make the best choice for them. When physicians are hired as consultants by companies whose products they prescribe, then conflicts of interest exist.That is why physicians and researchers should be made to disclose their pecuniary interest in any pharmaceutical company and in its drugs. The protagonists of DTC advertising have often argued that the mode has raised the awareness for and acce ss to important new medications as well as the ability of patients to actively engage their physicians in informed discussions about their prescription drugs. The antagonists of DTC advertising however, are of the opinion that the advertising cannot provide enough or detailed information that will enable the consumers to make appropriate drug choices (Sullivan, 2002).Marketing and advertising do not discriminate between segments of the society. For this reason, it is hard to see how the elderly, children, and the less endowed who are vulnerable and susceptible to deceptive and marketing strategies can become more informed in making drug choices (Greene, 2010). The antagonists argue further that the huge amount of money that pharmaceutical companies expend on DTC advertising could make prescription drugs more expensive to the consumers.DTC advertising could also adversely affect the relationship between the doctor and the patient (Beauchamp et al, 2008). It appears that the arguments against direct-to-consumer far outweigh arguments for. Wholeheartedly, any legislation by the U. S. Congress to ban direct-to-consumer (DTC) is supported by this author. DTC advertisings offer a lot of information such that would require assistance from professionals to be properly evaluated by the consumer in order to make good choices.DTC creates knowledge gap between the consumer and the marketer when the consumer cannot properly evaluate the information being received. The possibility that the knowledge gap would exist is very high especially among the less privileged members of the society. This gap is therefore open to manipulation to the advantage of the marketer. Public health is too important to be left the whims of the pharmaceutical industry to manipulate as they have been doing over the years with their unrestrained budgets on DTC.It is pertinent to say only United States has embraced DTC advertising of prescription dugs has never been permitted legally in Europe and it is banned outright in Canada (Green, 2007). Conclusion The case of Merck and its Vioxx recall has proved that pharmaceutical manufacturing companies need to strongly take into consideration the overall interest of public good. It is hard to imagine that decision makers at all levels in Merck would ignore the disturbing information provided by their own VIGOR study.The quest for make bigger profits and control the painkiller drug market seem to becloud their sense of judgments. Many lives were exposed to the risks of heart attack and strokes when the warning signs were staring them in the face. The company itself lost $33 million in market capitalization. This case obviously calls for more and stricter regulations by strengthening the operations of FDA. Reference Beauchamp et al, (2008). Ethical Theory and Business. Upper Saddle River, NJ: Pearson Prentice Hall Green, R. (2007). Direct-To-Consumer Advertising and Pharmaceutical Ethics.Retrieved June 9, 2010 from http://faculty. chas s. ncsu. edu/comstock Greene, J. (2010). Hidden in Plain Sight. American Journal of Public Health (2010) Vol. 100, No. 5. Retrieved June 27, 2010 from EBSCOhost Database Phua, K. & Achike, F. (2007). Vioxx and Other Pharmaceutical Product Withdrawals. Clinical Ethics. Retrieved June 27, 2010 from EBSCOhost Database Sullivan, P. (2002). No direct-to-consumer drug ads: CMA. Canadian Medical Association Journal, 11/12/2002, Vol. 167 Issue 10, p1153-1153, 1/3p. Retrieved June 28, 2010 from EBSCOhost Database [pic]