Wharton management professor Michael Useem, director of the school's Center for Leadership and Change Management, notes that one of the key mantras in corporate crisis management is: "Hide nothing, tell all."
Less than a week after Merck & Co.'s voluntary withdrawal of its blockbuster arthritis pain medication Vioxx, following an extended clinical trial that linked the drug to heart attacks and strokes, the jury is still out on whether the pharmaceutical giant followed this cardinal rule.
As headlines move past the company's initial announcement on Sept. 30 and begin to speculate on possible litigation, corporate liability and the financial implications of taking a drug used by more than 20 million people off the market, the spotlight has turned instead to previous suspicions about Vioxx, earlier FDA warnings about the drug's possible cardiovascular complications, and the drug company's own efforts to inform the public about possible risks since Vioxx was introduced in 1999.
What did Merck executives "know and when did they know it?" asks Wharton finance professor Andrew Metrick. "Have they been aware and knowledgeable about this? Were they doing their best to prevent bad news from coming out? That's the crux of it. And this will get fought out in a lot of trials."
Merck's decision to immediately withdraw Vioxx was based on new three-year data from what the company called a "prospective, randomized, placebo-controlled clinical trial" designed to evaluate the efficacy of Vioxx in preventing the recurrence of colorectal polyps in patients with a history of this condition. During the trial, Merck also collected cardiovascular data on the 2,600 patients involved; half took 25 milligrams of Vioxx a day, half took a placebo. After 18 months, the patients taking Vioxx showed an increased risk of heart attacks and strokes.
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