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Merc & Vioxx Case

Merck and the Recall of Vioxx

Florence N. Wandera
MGT 600 – Corporate Responsibility & Bus Law

Merck and the Recall of Vioxx
Case Summary
Merck & Co. Inc. is a global research-driven pharmaceutical company that develops, manufactures and markets a broad range of human health products. One such product is Vioxx, developed in 1994 and approved on May 21, 1999 by the United States Food and Drug Administration (FDA) for the treatment of pain, inflammation, and stiffness caused by arthritis. The drug was also later approved for use in the treatment of rheumatoid arthritis in both children and adults. The product was promoted aggressively by Merck and had emerged as one of the best selling drugs for the company within a year of its launch. However, medical experts raised doubts about the cardiovascular risks associated with Vioxx's long-term usage. In the initial years, Merck disagreed with the various medical studies that indicated cardiovascular risks until its own internal study indicated the risk. Finally, in September 2004, Vioxx was recalled from the market. This decision to recall the drug was expected to cost Merck $2.5 billion in revenues as it was the second largest selling drug next to Pfizer’s Celebrex in the category known as Cyclooxygenase (COX-2) inhibitors.
According to Merck’s estimates, between May 1999, and August 2004, about 105 million prescriptions were written for Vioxx in the US alone. The drug had been taken by 84 million people worldwide since its introduction and at the time of the recall, 2 million people were using it. Soon after the recall announcement, Merck’s share price fell by 27% from $45.07 to $33 per share, wiping out about $28 billion in market value. The case highlights the ethical issues involved in Vioxx's controversy and examines the way Merck handled the entire issue.

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