Merck & Co., Inc. Case Study

Merck & Co., Inc. Case Study

Introduction

Most people turn to pharmaceutical companies when they are ill or in pain. In the case of Merck, there was one drug that was determined could possibly cause fatal side effects for those taking it. Vioxx was first put on the market in 1999, but was voluntarily removed by 2004. The company learned that one of the drug's side effects could be increased risk of heart attack or stroke. Once these side effects become a major concern, Merck was facing a long battle of lawsuits and financial losses.

Situational Analysis

Problem

The problem for Merck was the introduction of the drug Vioxx. Vioxx was developed as a drug to help those who suffer from arthritis as well as other pains caused by inflammation. Vioxx was released in 1999 after the Food and Drug Administration approved the drug for use. Even before the release, however, Merck researchers were concerned about cardiovascular risks that could be associated with the drug. These researchers believed that there could be some cardiovascular issues, but the drug was still approved. Although there were concerned the drug was released and became very successful.

Once this research was released to the public, the lawsuits started to stack up for the company. People were suing the company because they believed Merck caused either themselves or a family member to suffer a stroke or heart attack. Merck found itself financial troubles with stockholders selling stock in the company. To make things worse for Merck, the courts were finding in favor of the plaintiffs in cases filed across the country. People have, however, been finding it difficult to collect on the punitive damages awarded by the courts. “In fact, none of the 45,000 people who have sued Merck, contending that they or their loved ones suffered heart attacks or strokes after taking Vioxx, have received payments from the company. In 2007, Merck looked to end the whole ordeal by agreeing to one big payment into an account.

When the lawsuits started to pile up, Vioxx started taking a non-supportive approach to handling the situation and went on the defensive. This continued for some time until Merck decided that it would be in their financial and in an attempt to save face, agreed to the previously discussed settlement. This was more of a collaborative approach that Merck implemented in order to work together with the lawyers of the Vioxx users and come up with a way to stop the bleeding financially.

There was always a high threat level to Merck once research and lawsuits began. It was up to Merck to determine whether they felt they had a low or high level of cooperation. Although there was low cooperation at first, the cooperation level was increased in order to hopefully put an end to the amount of money going toward legal fees.

Stakeholder analysis

Primary Stakeholders

The first primary stakeholder to the company would be the customers of Merck. These are people who are suffering from ...