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could be adduced for Merck’s troubles; from a very reputable pharmaceutical company to one that had its major brand withdrawn from the market with considerable adverse financial implications.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
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 very 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