Ethics
February 23rd
Merck: Background
• Most admired company in America for
7 straight years in the 80s
• Edward M. Scolnick (Brilliant) in charge
of Merck Research Labs
• Brought 15 unique new drugs to the
market in just 5 years in the 90s
• For two decades Merck published more
scientific papers and patented more
compounds than its competitors
• Fast Track FDA approval of new
drugs
• 13 new drugs approved on
average in less than 11 months
• Vioxx approved in under 6 months
• Pfizer face a review time of over
two years
• Culture of arrogance?
Fosamax (osteoporosis)
• $280 million sales in first year
• FDA wanted to withdraw from market
after it learned than it caused erosion of
the esophagus in some patients
• Scolnick used an aggressive letter
writing campaign and submitted more
info to FDA
• Fosamax re-labeled and allowed to
remain on the market. (have to sit
upright for an hour after taking it)
• 2003 sales $2.7 billion
block busters
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Cozaar: Hypertension $2.5 billion
Crixivan: HIV
Singulair: $2 billion
Propecia: Baldness
• By 1999 the pipeline was empty: Harder
to develop new drugs. Merck came
into the new millennium facing patent
expirations and few miracle drugs in the
offing
Vioxx
• Last of Scolnick’s blockbusters
• Discovered in 1994
• Cox-2 inhibitors
– To replace common painkillers like
ibuprofen which have the side effects of
ulcers and gastrointestinal bleeding. Some
estimated that these drugs killed 10,000
people a year due to intestinal bleeding
• Direct-to-consumer marketing $500
million $2.5 billion a year
Early warning signs
• Even before FDA approval Pennsylvania
study: Cox-2 inhibitors interfered with
enzymes that play key roles in warding
off cardiovascular disease
• Merck felt the evidence was
inconclusive
• 2000 own study showed Vioxx 3x more
likely than Aleve (naproxen)
• Merck argued that data misleading
because naproxen good for heart
• Merck Responsible
• 60 Minutes
• FDA can’t protect
• FDA Shares
Pfizer
• Celebrex #1 brand of Cox-2
• Also sales Bextra
• Initial studies only showed Vioxx
• Later studies indicated Celebrex
and Bextra had same problems
• Chose to not recall
• FDA asked them to suspend directto-consumers marketing
Outlook for Merck
• In 2003 work on potential
blockbuster drugs for depression
and diabetes didn’t pan out. One
didn’t work in clinical trials and the
other was linked to cancer
• Zocor ($5 billion a year) goes off
patent in 2006.
• Stock price $95 in 2000 is under $30
in February 2005
• VIOXX back
• Future?
Questions?
• On balance do you think Merck is
an ethical and socially responsible
company? Pfizer?
• How could the disaster with Vioxx
been avoided in the first place?
• What is your opinion of
pharmaceutical advertising?
• Should Merck have recalled Vioxx?
How do you respond to the following
statements from consumer advocacy groups?
• The more than $10 billion Merck
has hoarded attests to the
obscene profits these drug
companies are making at our
expense
• The FDA is in the pocket of the
drug industry: What a travesty this
is.
What can be learned
• Always be ready for the worst
scenario
• Be alert to early hints of trouble
• Eagerness to sue should be
factored into some decisions
• The pharmaceuticals industry
needs to improve its public image