Merck & Co.’s Vioxx Scandal

Merck & Co. is a pharmaceutical company that was the focus of a major scandal in 2004. It serves as a great case study for students to really understand why it’s so important to be fully transparent as a company.

In 2004, their arthritis drug Vioxx was pulled from the shelves after it appeared to have been responsible for more than 27,000 heart attacks and cardiac deaths. They recalled it after an internal study showed that patients taking the drug were more likely to have a cardiac episode than those taking a placebo.

In May of 2000, the executives at Merck & Co. made a fateful decision. The company’s top executives met to decide whether or not to conduct a study to determine if Vioxx, their new arthritis drug, was causing cardiovascular episodes, as a previously unrelated study’s results had suggested.

They ultimately decided not to conduct the study. Their scientists felt that the sample would have to be too large, and their marketing team felt as though it showed a lack in confidence in their drug, which would give power to rival drug Celebrex.

In 2011, Merck & Co. settled a class-action lawsuit, was agreed to pay $950 million, and plead guilty to a criminal misdemeanor charge. Merck & Co.’s stock fell 33 per cent that day.

If Merck & Co. had been transparent about their drugs from the beginning, and had not tried to ignore a massive problem, this would have never occurred. Consumers would have had much more faith in the company as a whole, as well as faith in pharmaceutical companies.

There are a growing number of people in the world who are refusing to take pharmaceuticals for fear that they are being lied to. How are we supposed to prove to them otherwise?

— Elizabeth McCarthy

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