Wednesday, January 05, 2005

Who Should Pay for Merck's Obstructionism?

When public corporations break the law or act deceptively, it is often the small investor who pays the price. This was clearly evident in the case of Enron. In that case, laws were obviously broken and some officers -- but not all -- were prosecuted.

Merck's actions in the months and even years prior to the "voluntary" withdrawal of Vioxx from the market has come under scrutiny not because any laws were broken, but because these alleged "obstructionist" actions violate a tenet of former CEO George W. Merck who said:
"We try never to forget that medicine is for the people. Not for the profits. The profits follow, and if we have remembered that, they have never failed to appear."

In a recent Pharma Marketing News opinion piece I suggested that "someone" should pay other than -- or more accurately -- in addition to the small stockholder (Merck's stock price declined precipitously after Vioxx was withdrawn). See Corporate Moral Values Anyone?

A reader responded: "You wanted someone to 'pay' for Merck's obstruction but in the same breath you find worrisome the decline in stock value? In our capitalist system this is exactly how company's [sic] pay for their transgressions! Adam Smith would say the system is working...."

I don't know if Adam Smith would be happy with today's corporate moral values or if he is turning in his grave, but not everything is "market driven" and measured in terms of dollars. Good will, respect, and trust are also important, especially in the pharmaceutical industry. As Mr. Merck implied, if you have these things, the dollars will follow.

No doubt Merck has lost a lot of trust and goodwill among consumers and this has hurt the entire pharma industry. This bothers me because a lot of people depend upon the health of this industry to make a living. I am sure many employees of Merck and other pharmacos will eventually suffer. So will the people that service the pharma industry -- ad agencies, consultants (including me), etc.

So Merck is paying, the pharma industry is paying, pharma employees and consultants will soon pay, but what about the people who consciously made unethical decisions to repress clinical trial data? And their superiors? Will they pay? Or will they get golden parachutes or simply move on to other positions?

I guess I am just an old-fashioned moralist that believes if you do something wrong, you should admit it and accept the consequences, which should include some kind of punishment.

Should someone go to jail? If it's true that thousands of people may have died while Merck knew of the cardiovascular effects of Vioxx and tried to hide the information, then, yes, perhaps someone should go to jail.

Maybe a good punishment would be to pay list prices for their own medications! But that's another tirade!

P.S. If you are a Merck employee and have an opinion, especially of your job is in jeopardy, I would love to hear from you. Your identity will be kept confidential.


  1. My essay on what Merck has to do to survive as an independent company is at

    Nice Blog.
    Don Johnson

  2. Anonymous10:38 PM

    In the end, the people will always pay for the mistakes of these massive drug companies. Money is no issue for them and they can always buy their way out.

  3. Anonymous5:28 PM

    When I look at drug companies I see a slew of them trying to find ways to bring drugs to market. If you ask any medical professional which companies conduct themselves and their studies above reproach I suspect you will find one common answer. Merck as a company has the cleanest studies in the market. Allow me to give you an example...

    VIOXX: Did you know that these studies were conducted with patients who were not taking asprin? Were you aware that rheumatoid arthritis is a marker for heart disease. You have to ask if this change impacted that outcome and if those patients were taking asprin would Merck have suffered this ill fate. Heck, Arcoxia is approved just about everywhere but here and the 20,000 patient study proved it was equal to insaids (top prescribed anti inflammatory) for risk of heart attack and stroke and more efficacious than Vioxx.

    CELEBREX: Did some studies also; however, they had their patients on aspirin. Ever wonder why Celebrex is still on the market? Although, given, it still has a black box warning.


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