Merck CEO quits over poor handling of Vioxx recall

The Board of Directors of Merck today announced its election of Richard Clark as the Company's CEO and president and a member of the Merck Board, effective immediately. This means that the current CEO, Raymond Gilmartin, who was scheduled to retire next year, is being asked to leave. Gilmartin has been widely criticized for keeping dangerous drugs like Vioxx on the market for years resulting in as many as 140,000 personal injuries in the United States alone. (Read previous article asking for management change at Merck after mishandling of Vioxx recall)

Since the recall of Vioxx, the company has lost over $25 billion in market cap, faces tens of thousands of lawsuits with liabilities estimated to be as much as $38 billion. The company has, however, refused to take responsibility for even one death and has been very confrontational in its approach towards Vioxx victims. Merck has also not made any provisions for its legal liabilities and if juries award Vioxx victims with what they are asking for, Merck is headed for bankruptcy.

Merck board of directors has been very slow in acting to make management changes. It has taken them more than six months to realize that Gilmartin has been largely responsible for Merck's poor strategy with regards to handling Vioxx recall. Gilmartin, who refused to quit after the Vioxx controversy erupted last year, has tried to put his best face on his firing. "I am a strong believer that a retired CEO should be available to help a new CEO, when asked, but otherwise should clear the way for the new leader," he said today.

It will be interesting to watch if there will be any major change in Merck's strategy with regards to ongoing Vioxx litigation. Prior to hearings today in Congress, a House Committee Committee conducted an investigation into FDA’s actions regarding Vioxx and FDA’s post-marketing surveillance of drugs. As part of the investigation, the Committee requested documents from Merck to better assess Merck’s knowledge of the cardiovascular safety risks of Vioxx, and whether or not they accurately informed the public and physicians of the risk. Merck used over 3,000 field representatives in the nationwide marketing of Vioxx to physicians and medical professionals.

A review of the documents supplied to the Committee raises questions as to whether Merck was presenting a fair and balanced presentation to physicians on the safety of Vioxx. These include questions regarding the training materials Merck prepared for its sales force to use after the cardiovascular risks of Vioxx became known and before the additional warnings were placed on the label. The Committee will also question FDA and Merck about the length of time it took to add the warnings on Vioxx labels. In documents obtained by the news media, Merck was reportedly training its sales force in how to avoid questions about the safety of Vioxx.

The investigation has also led the Committee to question the structure of FDA’s Center for Drug Evaluation and Research (CDER) and the work of and the relationship between the Office of New Drugs (OND) and the Office of Drug Safety (ODS). OND is a division within CDER that reviews new drug applications. ODS is a separate division within CDER that evaluates the safety of a drug after its approval by conducting epidemiological studies and evaluating adverse event reports.

During the Committee investigation, internal problems between OND and ODS became clear. To address the vulnerabilities in the interaction between OND and ODS, FDA announced the creation of Drug Safety Monitoring Board to monitor the post-marketing risks and benefits of FDA approved drugs, improve how drug safety information is disseminated to physicians and patients by creating a drug safety website, as well as resolving drug safety disputes. The Committee was pleased with the creation of the Drug Safety Monitoring Board but remains concerned with CDER’s approach to the post-marketing surveillance of drugs.

People who are being asked to testify include Dr. Steven Galson, Director, Center for Drug Evaluation and Research (FDA), Dr. John Jenkins, Director, Office of New Drugs, Center for Drug Evaluation and Research (FDA), and Dr. Paul Seligman, Director, Office of Pharmacoepidemiology, Center for Drug Evaluation and Research, Food and Drug Administration and former Acting Director, Office of Drug Safety. In disclosures by Mother Jones, Galson, Seligman, and Jenkins are all highly sympathetic to the pharmaceutical industry and favored Merck's interests in the Vioxx case rather than worrying about American lives. They tried to suppress the voice of Dr. David Graham who tried to make public the risks of Vioxx.

Merck will be represented by Dennis M. Erb, Ph.D., Vice President of Global Strategic Regulatory Development. John E. Calfee, Resident Scholar at American Enterprise Institute, an extremely conservative think tank that favors big business is also being asked to testify.

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