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Vioxx

Case Study Analysis 1: Vioxx and Celebrex
My name is Ray Gilmartin, and I am the CEO of one of the world's largest pharmaceutical manufactures, Merck. Through the 1990's my company developed a new pain relief drug known as Vioxx. Similar drugs were available at the time, but these alternatives caused serious damage to the user's stomach lining. Vioxx was designed to treat the user's pain, without having the negative impact that drugs such as Tylenol have. After Vioxx was approved by the Food and Drug Association (FDA) in 1999, the product was released onto the market. In 2003 Vioxx was able to sell US $2.5 billion world-wide, which represented 11% of Merck's revenue. After funding a study of long-term side effects of Vioxx, I have learned that after 18 months of use there is a substantial increase in the risk of a heart attack or stroke. The study has shown that Vioxx has caused up to 140, 000 additional cases of heart disease in the U.S. alone, of which 44% were fatal. My company has a direct rival in Pfizer, and is in competition with their version of the drug, known as Celebrex. It is very likely that Celebrex has the same side effects, but it is unknown what their course of action will be. I now must decide whether or not to remove the product from the market.

There are a number of stakeholder groups that will be impacted by my decision regarding this case. Firstly, as I am the CEO of Merck, my job security will be significantly impacted by a large scale decision such as this. If I decide to leave Vioxx on the market, and it is discovered that it is potentially fatal, then it is very likely that I will lose my job. As CEO, my decision will also directly impact both the employees and stockholders of Merck. If I remove Vioxx from the market, then the company will lose a great deal of revenue. The financial loss incurred as a result of this decision will most likely lead to downsizing in the company, and therefore a great number of employees...