Guiding a company in the midst of a crisis
Merck & Co. Inc. has been in crisis since Sept. 30, when the company pulled its prescription painkiller Vioxx off the market after a study confirmed the drug increased the risk of heart attack and stroke. Merck chief Raymond Gilmartin is grappling with multiple product-liability and shareholder lawsuits. Scheduled to retire in April 2006 under a plan in place before the Vioxx disaster, Gilmartin spoke with Globe reporter Christopher Rowland during a visit to Boston last week.
Q: Will Merck merge with another drug company?
A: We don't see that large mergers add to our pipeline or that they add to long-term growth. Our approach, in addition to investing in our own internal research, is to continue to establish relationships with biotech firms. Last year, we completed 50 arrangements. That's up from 10 in 1999. We have about 40 other situations in active discussions.
Q: Will the Vioxx fallout affect research at your new Boston lab next to Harvard Medical School?
A: This facility is involved in cancer, and also in areas such as Alzheimer's, obesity. These are areas that Peter Kim, our head of research, has described internally as must-win. It will be about 400 scientists and 100 support staff at capacity. We are not backing off that at all.
Q: How much are you setting aside for Vioxx claims? I have heard estimates that your liability exposure could be $10 billion to $20 billion.
A: We created a reserve at the end of last year, to bring our reserve to $675 million in total, which reflects the fact that we intend to defend the company. Heart attacks and strokes occur generally throughout the population for a number of risk factors. So we see this very much as a case-by-case situation.
Q: Do you feel in retrospect that Merck was wrong to aggressively market Vioxx when there were safety questions from the beginning?
A: All of our ads are submitted to the FDA before we run them. All of our promotion and marketing practices are governed by policies that ensure that our salespeople and our advertising give the fair balance and are consistent with the label. Physicians are still in charge.
Q: What is your plan as far as rehabilitating the image of Merck?
A: The image of Merck is determined by the actions that we take and have taken.
As people examine that behavior, the record shows that throughout this process we conducted ourselves in an ethical and responsible way.
Q: What kind of advice would you give to a chief executive who finds himself in similar circumstances? Did you ever consider going in the bunker?
A: I never considered it. What I have done is to be very accessible, and very visible to the media, very high level of engagement with employees worldwide, with worldwide webcasts. It's important to be engaged with your people and with people outside.
Q: Pfizer is holding fast to its painkillers Celebrex and Bextra. Do you feel it was right to withdraw Vioxx as opposed to weathering the storm?
A: There is no second-guessing in the company. When we had that data that showed an increased risk, and with alternative therapies being available, we felt that in the overall interests of patient safety the clearly responsible thing to do was to withdraw the drug.
Q: What more should the FDA do to study drugs after they've been on the market?
A: The FDA was all over the top of this all the time, including changes to the label for Vioxx. In the case of Vioxx, where there is a background rate of cardiovascular events, you would not pick up those signals unless you studied the drug the way we did in conjunction with the FDA.
Q: Do you take any prescription medication?
A: Yes, one.
Q: Can you say what you take?
A: In the interests of patient confidentiality, I don't think it's appropriate. It's a Merck drug.
Q: Is it expensive?
A: The key thing is I have insurance for prescription drugs.
