Can Merck bounce back from Vioxx?
As the first federal case over withdrawn painkiller Vioxx goes to trial in the US, David Quainton looks at Merck’s fall from grace and the implications for the pharma trade
Within days a quarter of Merck's share value was wiped away. £1.4bn in yearly sales dwindled. And there were widespread calls for the resignation of popular CEO Raymond Gilmartin, who eventually stepped down in May.
Over a year later, Merck is still reeling from the loss of its all-American 'apple pie' image – and the first US federal Vioxx trial is set to kick off next week.
Merck, Sharp & Dohme, the company's UK subsidiary, is also feeling the heat. Some of the 400,000 UK users of Vioxx – part of the Cox-2 inhibitor class – have threatened legal action in the US, and there are 103 suspected Vioxx-related deaths officially registered in the UK.
So far Merck's record in US courts is lost one, won one. And it has insisted that it plans to fight every Vioxx case against it 'over many years'. But can the company's reputation, and that of the pharmaceutical industry, recover from the episode?
Fall from grace
'Merck was routinely admired as one of the most respected companies in the US,' says Christopher Bowe, who has reported for the Financial Times on the Vioxx saga from New York. 'You can't underestimate how far the company has fallen.'
In an apparent effort to win back some lost ground, Merck has brought in Burson-Marsteller to rebuild its reputation (PRWeek, 19 August).
B-M declines to comment on the relationship, but Merck insists the corporate campaign had been in development long before the Vioxx fallout. Merck itself now has a five-strong press team in New Jersey dedicated to handling Vioxx enquiries.
'It took a hefty knock and its reputation is still suffering,' Kent GP Dr Julian Spinks tells PRWeek. 'For a company that was once so trusted it's difficult.
We read in the newspapers that Vioxx was being recalled before being told about it – it was a shock.'
According to Spinks there has been no tangible wooing of doctors to get them back on side. And patients, he says, do not need to be addressed: 'For patients it doesn't matter – they don't know who makes their drugs. I think GPs will continue to use Merck products.' But he adds: 'Merck and the pharma industry in general are less trusted now.'
Any attempt to curry favour with GPs such as Spinks could be stymied by the revised code of practice from the Association of the British Pharmaceutical Industry (ABPI), unveiled last week. Under the more stringent regulations, GPs can only be taken to two-star hotels and flown economy class – an attempt to help the industry shed its shady image.
According to Bowe, the US has had similarly strict rules in place for a long time. So what can Merck do?
At the moment, Bowe says, Merck is taking a 'business-as-usual' approach – the company hopes a string of successful new drugs will help interested parties move on from the Vioxx debacle.
'There's always been safety crises, ever since snake-oil salesmen,' says London-based FT pharma correspondent Andrew Jack. 'So Merck will recover – but it might need to do things a little differently.'
He insists the traditional model of blockbuster drugs will have to change: selling drugs to millions of people (in Vioxx's case more than 20 million worldwide) makes it very difficult to monitor patient reactions.
'In terms of PR the pharma industry in general does not do enough to enhance its image,' Jack argues. 'If Merck was known for programmes in the developing world and broader campaigns promoting a healthy lifestyle, it would have found it easier to recover.'
Bad medicine?
One of the charges levied at Merck was a lack of openness around its clinical trials. Whispers of cover-ups and a document called 'Dodge Ball Vioxx', intended to help sales people avoid health questions surrounding the drug, did the company few favours.
Merck spokesman Guy Bizzoco says the firm is committed to being more open. 'Merck has had a long-standing commitment to sharing scientific information with the public,' he says.
The firm is now registering all hypothesis-testing clinical trials that it sponsors and conducts on ClinicalTrials.gov, a US government-sponsored venture designed to encourage greater pharma transparency.
New York-based Ketchum global healthcare practice chief Mark Cater says: 'The Vioxx situation is no longer just Merck's problem – it has spilled over to become an industry issue. The pharma industry is now a lot more cautious about its brand comms, but Vioxx's effect will be to change the way the industry communicates for good.'
The general feeling from PROs, GPs and journalists is that people will continue to use Merck drugs, however much its corporate name has suffered – but the company will never fully get away from Vioxx.
'We can't speculate for how long the shadow of Vioxx will be cast [over Merck],' says Bizzoco. 'But Merck is prepared for the long haul.'
Bowe suggests the effect of Vioxx is that Merck will no longer be seen as everybody's favourite pharma firm.
'It's down in the murky waters with everyone else now. It's just as bad as all the other pharma companies,' he says. 'In that respect, for Merck it won't be happily ever after.'
Vioxx: rise and fall of a blockbuster
November 1998
Merck submits new drug application to the US Food and Drug Administration (FDA)
May 1999
Vioxx approved by FDA
May 2001
Merck issues press release saying Vioxx has a 'favourable cardiovascular safety profile'
September 2001
FDA issues warning letter to Merck claiming May's press release to be false
October 2003
Merck study finds 39 per cent increased risk of heart attack within first 90 days of taking Vioxx when compared with Pfizer's Celebrex
September 2004
Vioxx withdrawn
February 2005
Federal inquiry of Cox-2 inhibitors opened by the FDA
August 2005
First Vioxx lawsuit settled in favour of plaintiff – jury awards widow nearly £150m in damages
November 2005
Merck wins second Vioxx case
