Merck and Co. , Inc. is one of the largest pharmaceutical companies in the world with a market capitalization of over $110 billion dollars.

The company describes itself as a global research-driven pharmaceutical company that discovers, develops, manufactures, and markets vaccines and medicines to address unmet medical needs. The company also makes an effort to increase access to its medicine by donating and delivering them to people who need them. One particular area that has been a large part of Merck’s recent success is its pipeline of drugs to treat high cholesterol which is a major risk factor for cardiovascular disease.Because cardiovascular disease is the number one killer in the United States, the yearly market for cholesterol lowering drugs is worth close to 20 billion dollars (Freundlich 2009). In fact, the best selling drug in the world is used to treat high cholesterol. In spite of increased generic and new arrival competition, Lipitor retained its top position as the best selling global drug brand with sales of $13.

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35 billion in 2008 (Maggon 2010). Lipitor is manufactured and marketed by Pfizer, one of Merck’s main competitors. Merck’s Zocor was itself a multi-billion dollar drug, achieving annual sales of $4.

billion in 2005, and was second only to Pfizer’s Lipitor in terms of market share and sales prior to losing its patent protection in 2006 (Genesee v. Merck 2008). With this much money at stake for companies in the pharmaceutical industry, the pressure to deliver effective new therapies can sometimes create ethical and social responsibility issues. These issues are at the heart of a class action complaint that is currently ongoing against Merck. This paper will discuss the allegations against Merck related to their multi-billion dollar blockbuster drugs Vytorin and Zetia.It will also discuss the complex ethical issues surrounding the allegations as they relate to the actions that Merck took to maintain its status as a major player in the multi-billion dollar cholesterol market. The case against Merck centers around the alleged concealment of material information and misleading statements that were made in regards to a large, multi-year clinical trial called The Effect of Ezetimibe Plus Simvastatin Versus Simvastatin Alone on Atherosclerosis in the Carotid Artery (ENHANCE).The complaint contends that false information and the delay in releasing the clinical results artificially inflated the share price of the company’s stock.

The ENHANCE trial was designed to compare the improvement in the progression of atherosclerosis in patients that took Vytorin (a drug combining Zocor (simvastatin) and Zetia (ezetimibe)), with patients that took only Zocor (simvastatin). In other words the trial isolated the carotid artery as the place where plaque buildup would be measured to determine whether the Zocor/Zetia mix in Vytorin was more effective at reducing plaque than Zocor alone.The combination pill Vytorin failed to show any improvement in the progression of atherosclerosis over patients taking Zocor (simvastatin), a drug that is available as a generic and sells for a fraction of the price (Genesee v. Merck 2008). The main reason I took interest in this subject is because I am employed in the pharmaceutical industry. The products that my company manufactures, markets, and sells are in direct competition with Merck’s. I also feel that because I am in this industry I should understand as much as possible about negative information in the press concerning “Big Pharma”.

I also find this case interesting because the United States struggles to reign in health care costs while physicians are prescribing what seems like an unproven and costly medication to millions of patients. Hamilton (2008) states this about the scandal: “It’s also offered an illuminating look at how drug companies push new drugs, which are often approved despite the absence of proof that the treatments actually help patients-not to mention the ways Big Pharma can obstruct or delay studies that might dampen physicians’ enthusiasm for writing more prescriptions. This case also presents a number of ethical questions that everyone should be concerned about. It is likely that most people know someone who is taking a pharmaceutical medication. Whether the medication is for cardiovascular disease or simply for a headache, we should all feel confident about the drugs that are available to treat these ailments.

Everyone should agree that Big Pharma has a huge burden when it comes to social responsibility. These companies must balance two ideas of social responsibility in attempting to make lives better while simultaneously delivering positive results for shareholders.This case shows that there is a fine line between these two ideas. The timeline of events started in 2004 when researchers for the ENHANCE trial began to enroll patients. The data from this trial was very important because Merck had the commercial viability of Vytorin and Zetia on the line.

It was also the first trial that would answer whether Zetia’s ability to reduce cholesterol has real biological benefits for patients (Genesee v. Merck 2008). During the clinical trial but prior to its completion in April 2006 Merck made many positive statements to investors about the expected data and that the results could drive future growth.Statements included the additional benefits on cardiovascular health that Vytorin could provide and these ideas were being pre-maturely marketed to the investment community. The positive spin to investors continued until December 2005, when Merck began to eliminate any public mention of ENHANCE or Vytorin. It was later learned that this was around the time that Merck representatives had received complete data from the first group of patients. Because Merck had direct access to ENHANCE data as it was collected they began to realize early on that the trial was an abject failure.Merck quickly began to look for ways to manipulate the data into a more positive outcome.

In early 2006, Merck began to question Dr. Kastelein, the lead investigator of the trial, on the accuracy of the data and pointed out what they alleged were problems: “Merck began sending what became a constant flow of inquiries to Dr. Kastelein asking him and his lab to check and clarify data and re-read images in a bid to resolve the problems. Early in 2006, the company’s committee proposed a different approach to reading the still-blinded data, and pitted Dr. Kastelein’s lab against an outside research team to see whether one would be more accurate. There was no meaningful difference and Dr. Kastelein’s team was kept on the case, spending the second half of 2006 re-reading most of the 40,000 images taken in the study” (Genesee v.

Merck 2008).Merck was determined to shape the results and tried a different approach in January 2007. This time Merck hired an expert in epidemiology, Dr Michiel Bots, M. D. , Ph. D. The company requested that Dr. Bots provide a written report that would explain why the ENHANCE data was purportedly flawed.

In the end Dr. Bots concluded once again that the data was collected in a consistent and valid manner. Finally, on November 16, 2007 a last attempt was made to salvage any positive findings relating to the clinical results.

This time Merck decided to assemble an expert panel and open discussions once again about conceived problems with the ENHANCE data. The reason behind this final attempt was later found to be an effort to change the goal, or primary endpoint of the study.Scientists generally assume for a clinical trial to be valid, its goals must be defined before it begins and never changed, otherwise the people conducting the trial could change the goals to conform to the data the trial has actually produced (Berenson 2007). Merck would then place responsibility on the expert panel for changing the endpoint. Documents would later reveal that the panelists denied supporting such a change and that the idea originated with Merck (Genesee v. Merck 2008). The fact that many top executives within Merck had direct involvement with the data is also uncommon and continues to be an ethical theme of this case.Most clinical trials are set up to have the data controlled by a lead investigator who is put in charge of the study.

By controlling data and collecting it in a blinded fashion clinical trials can be conducted in a way that eliminates or at least minimizes any potential bias or conflict of interest. This attempted manipulation of the data was ultimately called out as the key factor for the delayed results. Finally, on January 14, 2008 after two years of public scrutiny in the financial press and by way of Congressional inquiries the results were disclosed.The data would show that Vytorin was no better at slowing the progression of atherosclerosis than generic simvastatin (i. e.

, Zocor). This data was in direct contradiction with Merck’s ongoing marketing message of “lower is better”. Merck had been saying to the investment community all along that because of Vytorin’s ability to reduce low-density lipoprotein (LDL) cholesterol it was therefore superior to other drugs when they knew this was false, and misleadingly claimed Vytorin’s unique “dual inhibition” provided health benefits beyond those of competing drugs, when Merck knew it was simply a marketing ploy (Genesee v. Merck 2008).The case against Merck not only puts emphasis on the way the results were delayed but also the way in which Merck continued to aggressively market Vytorin in light of the knowledge they had gained from the negative results of ENHANCE. Merck spent over $200 million in 2007 on direct-to-consumer advertising for Vytorin alone in the United States (Genesee v.

Merck 2008). Was Merck acting with a sense of corporate social responsibility? It seems that Merck was following the instrumental theory of CSR in that the company is only a strategic tool to achieve economic objectives, and ultimately, wealth creation (Garriga and Mele 2004).As stated in Genesee v. Merck (2008), “by the time Merck released the preliminary “top line” results of ENHANCE in January 2008, amid public pressure and Congressional inquiries, Vytorin and Zetia had contributed hundreds of millions of dollars to Merck’s profits each quarter, and had resulted in massive quarterly growth in Merck’s cholesterol franchise. ” Genesee v.

Merck (2008) goes on to further describe in detail the disastrous events that occurred in the months to come. As criticisms of the Company and its lack of scientific and moral ethics reached a fever pitch, Merck’s stock price continued to drop over a series of days, closing at $47. 79 per share on January 25, 2008. When the full ENHANCE results were released on Sunday, March 30, 2008, Merck’s stock price fell from $44. 51 on March 28, 2008 to a close of $37. 95 on March 31, 2008 (the next trading day), a one-day decline of approximately 15%. In sum, as a consequence of these disclosures, Merck investors lost more than $47 billion in market capitalization in less than three months. Merck suffered a similar setback in September of 2004 when its popular arthritis drug Vioxx was removed from the market.

Vioxx was linked to an increase of heart attacks and stroke. That incident reduced Merck’s market capitalization by nearly $27 billion and was attributable to its suppression of negative clinical data (Genesee v. Merck 2008). The delay in the release of the results for the ENHANCE trial has attracted a great deal of attention. The Food and Drug Administration and the House Committee on Energy and Commerce have both launched investigations.Congress was quick to act as they charged Merck with intentionally concealing negative data surrounding the ENHANCE trial. Representative John D. Dingell, Chairman of the Committee on Energy and Commerce commented that the failure of the ENHANCE trial raises concerns about any benefits of adding Zetia to an inexpensive generic.

Representative Dingell also made comments about the uncommon methods that Merck used to delay the results and the attempts to manufacture the data into something artificially positive were very suspicious in nature (Genesee v. Merck 2008). Physicians were also very aware of the results and began to voice their concerns over the way in which the ENHANCE data was handled.

Dr. Allen J. Taylor, Chief of Cardiology at Walter Reed Army Medical Center explained that there was a growing concern among cardiologists. He went on to say that cardiologists anxiously await these types of results to learn how effective these drugs will be.

Physicians can then make decisions based on the data to hopefully reduce the risk of cardiovascular events in their patients (Berenson 2007).The long-held assumption that “lower is better” for LDL cholesterol was being questioned because ENHANCE showed that arterial plaque actually worsened in some patients. Others physicians echoed the same views and feel that the drug companies have a responsibility to release data, positive or negative, in a timely manner. People have been on these drugs without the benefit of additional data that calls into question how effective they really are. With a complex case such as this there are issues surrounding the case that seem to fall from the spotlight.During the investigations it appears that at least one Merck employee, executive vice president Carrie Cox, sold millions of dollars worth of company stock after ENHANCE ended but before the results were released to the public.

It would be very tempting for someone with privileged knowledge to try and take advantage of this type of situation. The company’s response included the fact that executives follow a very stringent process before they are allowed to sell company stock. These types of transactions even require that a lawyer become involved to pre-clear any trades.

The company goes on to say that Carrie Cox followed all requirements of the SEC pertaining to these types of transactions. It has been reported that regulating bodies have not made any inquiries into the timing of her trades (Barrett 2008). Another issue surrounding this scandal is the fact that the Food and Drug Administration which is tasked with assuring the safety and effectiveness of drugs, seems to have dropped the ball. The lack of involvement that the FDA has shown after these drugs were approved should be alarming. It is unclear what type f pressures this governing body is under to facilitate the delivery of new medicines.

Clearly they could have done more to regulate the marketing tactics of Merck or to hold the protocols of the ENHANCE trial to more rigorous standards. The final concern regards the fact that physicians were willing to prescribe this medication at an astounding rate. In 2006, physicians wrote about 32 million prescriptions for Vytorin and Zetia combined (Barrett 2008). At this rate it raises the question of whether physicians were prescribing these medications strictly in accordance with Vytorin and Zetia’s approved indications.This is not to say that physicians were doing patients a disservice, it simply points out the fact that marketing can trump science in some instances. It is still too early to tell what the final resolution will be in this case against Merck. The information that has been uncovered up to this point seems to paint a clear picture of corporate greed. One unfortunate result of this case is the fact that the pharmaceutical industry as a whole will receive a black eye because of the seemingly unethical decisions that were made by Merck executives.

In light of the perceived damage, Merck continues to maintain its stance that both Vytorin and Zetia are worthwhile treatments in the fight against cardiovascular disease. This case highlights many ethical shortcomings. I would like to point to a particular ethical theory of corporate social responsibility. The summary of the common good approach by Domenec Mele seems to be in direct contradiction with the way Merck has handled its business.

Mele states: Business contributes to the common good in different ways, such as creating wealth, providing goods and services in an efficient and fair way, at the same time respecting the dignity and the inalienable and fundamental rights of the individual. Furthermore, it contributes to social well-being and a harmonic way of living together in just, peaceful and friendly conditions, both in the present and the future” (Garriga and Mele 2004). This case breaks away from this statement by failing to provide evidence that goods were produced in a fair way.Merck took it upon themselves to say what was fair in that they did not follow accepted protocols in delivering an un-biased clinical trial.

The case further deviates from this approach in the fact that individual patients were not respected and that they were not of concern. The concern seems to be the maximizing of profit against everything else. However this turns out, Merck has made it clear that they can create demand by using marketing as a tool to outweigh scientific facts. One can only hope that this saga will serve as a moral compass for future executives.