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Merck’s Merry Christmas

by CHRISTOPHER BRAUCHLI

For all three groups Christmas came early. For the first group it came in September. For the second group it came in mid-December and for the third group, which got the best present, it came at the end of November. All the gifts came from Merck & Co.

On September 30 folks who had suffered from arthritic joints that were being helped by Merck’s Vioxx learned that although the joints might feel better their hearts might not share in the relief. On that date it was revealed that the FDA had issued a statement in which it said that people taking Vioxx: “face twice the risk of a heart attack compared to patients receiving a placebo.” Those with sore joints probably did not relish the thought of relieving joint pain at the risk of dying of a heart attack. It hardly seemed like a reasonable quid pro quo. Although I am not a scientist and hence unable to judge who is right and who is wrong, there are those in the scientific community who believe that Merck knew or could have known, had it chosen to look, that the drug posed a considerable risk to its users.

According to one group of Swiss scientists, Merck should have known of the problem as early as 2000. The group at the University of Berne analyzed the results of 18 “randomized clinical trials” and 11 “observational studies.” The scientists, conclusions were that a decision to remove the drug from the market place should have come three years before the decision was in fact reached. The scientists said that Merck’s own study called “Vigor” demonstrated that people taking Vioxx had a five times greater chance of having a heart attack than similar patients on another anti-inflammatory drug also being used to alleviate the suffering of those afflicted with arthritis. The Swiss scientists were not the only researchers who questioned Merck’s conduct with respect to that drug.

On December 2, 1999 the doctor who headed the Vigor trial for Merck wrote a memorandum in which he said Vioxx patients were suffering twice as many events of death or “serious cardiovascular” problems as patients using naproxen. Whether Merck knew or should have known others will decide as time goes on. What everyone knows is it was an early Christmas present of the unpleasant sort for those who had been taking the drug.

An equally unpleasant Christmas present was delivered to 700 Merck employees exactly 10 days before Christmas. They were told that they would be losing their jobs before year end. In doing so, they were joining the 4,400 other Merck employees who had already been told their jobs would disappear. The 700 persons who were losing their jobs were being fired because of the adverse effect news of Vioxx’s removal from the market place had on the company’s earnings. As unpleasant as all that news was for customers and low level employees, there was one group of people associated with Merck for whom the Christmas season promised to be a lot more cheerful. Those were the highly paid executives at the company.

One of the risks attendant upon disclosures such as those made about Vioxx, is that the company manufacturing the tainted drug may be taken over by another company. When that happens there is always a chance that the top level employees will find themselves jobless which is, understandably, distressing to the affected employees. In an attempt to protect top level employees from such untoward effects and in order to give them the peace of mind everyone wants during the holidays, the Board of Directors of Merck did a very courageous thing, even knowing that people like me would probably be critical since the company’s stock has dropped by 70 percent since 2000 and suffered a $25 billion loss in market value following the Vioxx withdrawal announcement on September 30.

On November 30 it said, in so many words, that it was doing something to guarantee its top 230 managers a peaceful holiday season. If another company buys all of Merck or as little as 20 percent of its stock, those managers will each get between 1.5 and 3 years salary plus a bonus. That would warm anyone’s hearth and heart during Christmas and that’s not all. If following a takeover, one of the 230 gets fired or resigns for good cause, the payment will be made. No one knows how much that will cost the company but some analysts say it will be in the hundreds of millions of dollars.

Anita Larsen is a Merck spokeswoman. She says this has nothing to do with Vioxx problems. The board had been considering this plan long before September 30. That might be. Only a really clever group of corporate types would announce it after September 30 and shortly before announcing that the company was spoiling Christmas for an additional 700 employees. Welcome to the world of corporate America and a happy new year.

CHRISTOPHER BRAUCHLI is a lawyer living in Colorado. His column is syndicated by Knight-Ridder. He can be reached at: Brauchli.56@post.harvard.edu

 

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