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Merck’s Vioxx Catastrophe – Case Summary October 26, 2006

Posted by Laxmi Goutham Vulpala in case studies, Uncategorized.
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Background

Merck is one of the most reputable drug companies. It is very highly regarded for its   innovative drug discoveries to treat diseases such as AIDS, Osteoporosis, High cholesterol and Hypertension and have improved the human lives around the world.
Merck’s innovative ability, its reputation along with the meticulous submission of documents  allowed the company to secure FDA approvals much faster than its competitors.

When Merck released its drug Vioxx for the treatment of arthritis, the drug’s effectiveness combined with an effective direct to consumer marketing campaign made it a blockbuster drug with $2.5 billion in sales, but when it was revealed during a study that the drug increased risk of cardio vascular disease by at least three times, Merck quickly withdrew the drug from the market.

Mistakes

Merck can be faulted for several questionable decisions and judgments with the Vioxx launch. They either ignored or dismissed several early indications of increased risk of heart attacks both in its own studies and other published articles, in an attempt to get to the market faster. This proved to be deadly when further studies conformed the suspicions and lead to ultimately lead to another bad decision of recalling the drug from the market too soon. This was probably an attempt to avoid potential lawsuits, when the jury was still out on whether the benefits of vioxx outweighed its risks. Merck should instead of a recalling, should have continued to work with FDA and have them make the decision of what corrective action needs to be taken.

The decision to withdraw neither helped Merck with the pending lawsuits nor improved their image, as they would have hoped for, instead they lost the market of customers who would still have taken Vioxx in spite of the risks.

Lessons Learnt

As a result of this fiasco, implications for big pharmaceutical firms like Merck are clear, they have take more time to conduct more clinical studies and assess the health risks associated with the drugs even if it means a delay in the entry of the drug into the market.

They also need to be more open and communicate these risks more effectively to doctors and patients using these drugs, this will help prevent potentially devastating lawsuits. They will also need lobby for favorable legislations to limit damages awarded in case something goes bad unintentionally.

Merck  also need to emphasize and communicate more effectively about  the amount of money spend for social programs and how their research saved innumerable lives and counter the negative press they receive for their high prices.

Source (Marketing Mistakes and Sucesses Hartley)

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Comments»

1. Mohammed salem - May 16, 2008

I think also FDA have to be more strict in approving drugs. They should attract the best of the best doctors and experts in order to judge drugs before anything bad happen from those money seeker companies.
I’ve read the case from the mentioned book.

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5. jamessilverthorn - May 5, 2016

Lobbying for limits? Seriously. If a pharmaceutical company can’t do thier job shut them down.


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