Report doesn't clarify Merck situation

Report clears Merck executives in Vioxx case, but critics continue to question company

Report clears Merck executives in Vioxx case, but critics continue to question company

While an investigation undertaken by an independent Merck board committee found that Merck executives did not knowingly expose Vioxx patients to adverse side effects, how the report will affect the company's corporate reputation remains to be seen.

In a 20-month, $21 million investigation, lawyers from Debevoise & Plimpton, led by John S. Martin Jr., a former US district judge, found that executives at Merck had not knowingly put Vioxx patients in cardiovascular danger. Merck had established a special committee, headed by independent Merck board member Dr. William G. Bowen, to commission the investigation.

Merck's troubles began in September 2004 when it pulled its miracle arthritis drug off the market owing to findings that it caused cardiovascular distress, and the pharma giant's stock and reputation plummeted.

Even though the Martin Report, as the 1,700 page report culled from the investigation is called, has exonerated the pharma giant's executives, some critics say the report is not credible because of Merck's board's involvement, even though Bowen, a non-executive and former president of Princeton, helmed the independent report.

The report's critics cite the reputation of the law firm as pro-corporate and see this as a necessary, but calculated PR move by the company to seek cover for liabilities.

"It's not going to change anyone's mind," says Alex Berenson, a reporter for The New York Times who has extensively covered the Vioxx situation. "It reads like a defense brief; it was paid for by the company. I don't think it will change anyone's attitude one iota. It's clearly intended to impact the litigation."

Berenson adds: "Merck had to do this back in 2004 to appear to be active."

Jay Gould, a partner at corporate law firm Pillsbury Winthrop Shaw Pittman, says the report was not surprising.

"I don't know of any firm that wouldn't do what [Debevoise & Plimpton] did," Gould told Reuters. "That's our job. We're not paid to be impartial."

Ray Kerins, executive director of media relations at Merck, says the company was "pleased" with the content of the report. Merck released a statement September 6 - the day the report was released - stressing the objective nature of the findings and claimed that it affirms "what we at Merck have always believed."

The statement went on to say that Merck "will consider carefully the criticism and the facts underlying it and determine whether action is appropriate to address it."

Kerins referred specific questions to the statement, but did tell PRWeek that the Merck communications team is ready to handle any questions regarding the proceedings of the study and could not speculate on how the report may be used in the future by the communications team to address corporate reputation issues.

"We're still in the process of trying to decide what and if this thing is going to be used," he says.

The report also revealed that "... certain members in the marketing and sales departments sought to garner support for the drug among important clinicians who might prescribe the drug and thought leaders who might influence others about the benefits of Vioxx. Documents prepared in connection with their efforts refer to 'neutralizing' physicians who were critical of Merck or Vioxx by offering grants or incentives."

But the report did not find any evidence that senior management condoned this practice and shows instances of the internal communications team working to stop such practices by its sales reps.

The only thing that appears certain in the wake of the Vioxx withdrawal is that the company's primary reputation battle will take a backseat to its litigation battle if the 14,000 active lawsuits against it continue.

According to Merck's August 7 SEC filing, "At this time, the company believes that its insurance coverage with respect to the Vioxx lawsuits will not be adequate to cover its defense costs and any losses."

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