1. Ethics February 23rd

2. Merck: Background Most admired company in America for 7 straight years in the 80s Edward M. Scolnick (Brilliant) in charge of Merck Research Labs Brought 15 unique new drugs to the market in just 5 years in the 90s For two decades Merck published more scientific papers and patented more compounds than its competitors

3. Fast Track FDA approval of new drugs 13 new drugs approved on average in less than 11 months Vioxx approved in under 6 months Pfizer face a review time of over two years Culture of arrogance?

4. Fosamax (osteoporosis) $280 million sales in first year FDA wanted to withdraw from market after it learned than it caused erosion of the esophagus in some patients Scolnick used an aggressive letter writing campaign and submitted more info to FDA Fosamax re-labeled and allowed to remain on the market. (have to sit upright for an hour after taking it) 2003 sales $2.7 billion

5. block busters Cozaar: Hypertension $2.5 billion Crixivan: HIV Singulair: $2 billion Propecia: Baldness By 1999 the pipeline was empty: Harder to develop new drugs. Merck came into the new millennium facing patent expirations and few miracle drugs in the offing

6. Vioxx Last of Scolnick’s blockbusters Discovered in 1994 Cox-2 inhibitors –To replace common painkillers like ibuprofen which have the side effects of ulcers and gastrointestinal bleeding. Some estimated that these drugs killed 10,000 people a year due to intestinal bleeding Direct-to-consumer marketing $500 million $2.5 billion a year

7. Early warning signs Even before FDA approval Pennsylvania study: Cox-2 inhibitors interfered with enzymes that play key roles in warding off cardiovascular disease Merck felt the evidence was inconclusive 2000 own study showed Vioxx 3x more likely than Aleve (naproxen) Merck argued that data misleading because naproxen good for heart

8. Merck ResponsibleMerck 60 Minutes FDA can’t protectFDA FDA Shares

9. Pfizer Celebrex #1 brand of Cox-2 Also sales Bextra Initial studies only showed Vioxx Later studies indicated Celebrex and Bextra had same problems Chose to not recall FDA asked them to suspend direct- to-consumers marketing

10. Outlook for Merck In 2003 work on potential blockbuster drugs for depression and diabetes didn’t pan out. One didn’t work in clinical trials and the other was linked to cancer Zocor ($5 billion a year) goes off patent in 2006. Stock price $95 in 2000 is under $30 in February 2005Stock price

11. VIOXX backVIOXX Future?Future

12. Questions? On balance do you think Merck is an ethical and socially responsible company? Pfizer? How could the disaster with Vioxx been avoided in the first place? What is your opinion of pharmaceutical advertising? Should Merck have recalled Vioxx?

13. How do you respond to the following statements from consumer advocacy groups? The more than $10 billion Merck has hoarded attests to the obscene profits these drug companies are making at our expense The FDA is in the pocket of the drug industry: What a travesty this is.

14. What can be learned Always be ready for the worst scenario Be alert to early hints of trouble Eagerness to sue should be factored into some decisions The pharmaceuticals industry needs to improve its public image