The Recall of Vioxx


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Case Details:

Case Code : BECG046
Case Length : 13 Pages
Period : 1998-2004
Pub. Date : 2005
Teaching Note :Not Available
Organization : Vioxx
Industry : Pharma
Countries : US

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"A heart attack in exchange for an ulcer is a poor treatment." 1

- Dr. Wayne Ray, Epidemiologist, Vanderbilt University.

"Had the company not valued sales over safety, a suitable trial could have been initiated rapidly at a fraction of the cost of Merck's direct-to-consumer advertising campaign." 2

- Eric J. Tapol, Chairman of Cardiology, Cleveland Clinic.

Introduction

On September 30, 2004, the US based Merck & Company (Merck), a leading global pharmaceutical company, recalled Vioxx as it doubled the risk of heart attack and strokes for long term users.

Vioxx was an anti-inflammatory drug used to treat arthritis and acute pain without the stomach irritation caused by other non-steroidal anti-inflammatory drugs (NSAIDs).3 The decision to recall Vioxx was expected to cost Merck $2.5 bn in revenues as it was the second largest selling drug next to Pfizer's Celebrex in the category known as Cyclooxygenase (COX-2) inhibitors.4 Vioxx was launched in May 1999. According to Merck's estimates, between May 1999 and August 2004, about 105 mn prescriptions were written for Vioxx in the US. The drug had been taken by 84 mn people worldwide since its introduction and at the time of its recall 2 mn people were using it. Soon after the announcement of the recall, Merck's share price fell by 27% from $45.07 to $33 per share, wiping out $28 bn in market value.

Vioxx was the fastest selling drug in Merck's product portfolio, thanks to the company's aggressive marketing strategy.

Ever since its launch, medical experts had raised doubts about the cardiovascular risks associated with Vioxx's usage. Over several years following its launch, various reports published in medical journals and media have raised concerns about the risk of heart attack being linked to the usage of Vioxx.

However, Merck disagreed with all the reports until its own internal study suggested cardiovascular risks if Vioxx was used for more than 18 months. Reacting to the withdrawal of Vioxx, Steven Galson, acting director of the FDA's Center for Drug Evaluation and Research said, "We have been concerned and aware of the potential for cardiovascular effects for the last few years, and this is not a total surprise"5...

The Recall of Vioxx - Next Page>>


1] Gardiner Harris, Alex Berenson, Barry Meier, Despite Warnings, Drug Giant Took Long Path to Vioxx Recall, New York Times, November 14, 2004.

2] Failing the Public Health - Rofecoxib, Merck and the FDA, New England Journal of Medicine, October 21, 2004.

3] NSAIDS are a class of arthritis medications used to treat pain and inflammation.

4] COX-2 selective inhibitors are the new class of NSAIDs, which are considered to be safe for the stomach.

5] Rubin Rita, How did Vioxx debacle happen?, USA Today, October 11, 2004.

 

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