Vioxx

Business and Society.

Merck was one of the world’s leading pharmaceutical firms, in 2005 the company ranked 4th in sales. However in September 2004 the company’s once best-selling prescription painkiller, Vioxx had to be pulled off the market after the pharmaceutical giant realised it increased the risk of heart attacks and strokes. After this news was announced the company’s stock price reached an 8 year low, dropping by 30% to $33 per share. By late 2005, more than 6000 lawsuits had been filed against Merck, alleging that Vioxx had caused death or disability. During the 5 year period Vioxx was available on the market, from 1999 to 2004, over 84 million people had taken the drug worldwide. It was estimated that 139,000 people in the USA had had heart attacks or strokes as a result of taking Vioxx, of these about 55,000 had died.₁

The main objective of this report is to study and analyse the issues regarding the withdrawal of Vioxx from the market and also to consider the issues surrounding and leading up to this event.

Question 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 policy makers, and the handling of the recall. What could or should Merck have done differently if anything?

‘Corporate Responsibility can be defined as how companies address the social, environmental and economic impacts of their operations’₂ Merck had enjoyed a reputation as one of the most ethical and socially responsible of the major drug companies. It had been named ‘most admired’ company by Fortune Magazine for 7 consecutive years (1987 to 1993) and also featured on the cover of Time under the title of, ‘The Miracle Company’. Merck’s philanthropy was legendary, consistently appearing of the list of best companies to work for and in the portfolios of social investment...