Case Study Analysis 1: Vioxx and Celebrex

Essay by nirvana2University, Bachelor'sA+, February 2006

download word file, 8 pages 3.0

Vioxx and Celebrex are prescription medicine designed for the relief of arthritis pain. They were designed because the existing available medication such as aspirin or ibuprofen was often the cause of stomach ulcers and bleeding. By 1999 Merck and Pfizer had developed Vioxx and Celebrex respectively, new drugs that provided relief from arthritis pain without the negative side effects of older medications. These drugs were soon approved by the FDA, Health Canada, and other governmental pharmaceutical regulators globally. Merck and Pfizer marketed the drug to the public and were extremely successful. In 2003 Merck sold US $2.5 billion globally this accounted for 11% of the company's revenue for the year. Studies of Vioxx, conducted because of Adverse Drug Reaction reports from physicians indicating that after 18 months of use, there is a substantial increase in the risk of heart attack or stroke. As the CEO of Merck, I, Ray Gilmartin must decide between taking the potentially harmful drug off the market and taking advantage of another 18 months of profit while more controlled tests are conducted regarding the safety of the drug.

In the case of Vioxx, there are many parties who will be affected by the outcome, whether it is a direct or indirect effect. Primary stakeholders have direct stake in the outcome of the dilemma, while secondary stakeholders have indirect stake in the dilemma.

I, Ray Gilmartin posses a great deal of stake in the decision that I make. It is possible that if Merck loses the profit it is making from Vioxx my job will be lost as well. My image as an effective leader will be impacted either way. If I make the decision to take the drug off the market, my reputation as a money making business man will be tarnished, however if...