$21M report finds management 'acted with integrity' in the development and marketing of Vioxx.
NEW YORK -- A report commissioned by Merck & Co.'s board said Wednesday the drugmaker's top executives did not knowingly put patients at risk in developing and marketing Vioxx, the popular arthritis drug withdrawn after a study showed it increased heart risks.
The 20-month review of the drug company's conduct concluded Merck management "acted with integrity" in the development and marketing of Vioxx, according to former Manhattan federal judge John Martin, who led the probe.
The report, on which Merck (Charts) spent about $21 million, criticized certain Merck promotional activity but generally absolved top management.
"Critics contend that senior officials at Merck knowingly put patients at risk of cardiovascular events rather than jeopardize the profits that Merck generated from the sale of Vioxx," the report said. "After an exhaustive investigation, we have concluded that there is no basis for such a claim."
Martin, along with other lawyers and paralegals at the firm of Debevoise & Plimpton LLP, spent more than 53,000 hours on the 179-page report, which also included about 1,500 pages of appendixes.
They interviewed 115 people including top company executives and drew upon testimony in civil and governmental proceedings.
One securities lawyer who isn't involved in litigation involving Merck questioned the objectivity of the Merck-sponsored report.
"The conclusion of Merck's own counsel cannot possibly be surprising," said Jay Gould, partner in Pillsbury Winthrop Shaw Pittman LLP. "I don't know of any firm that wouldn't do what [Debevoise & Plimpton] did. That's our job. We're not paid to be impartial."
Merck board member William Bowen, who led the special committee reviewing the company's Vioxx conduct, said the board was "reassured" the report found company management acted responsibly.
"The main question the board wanted answered was: 'Did the senior people at Merck knowingly put people at risk in ways that they should not have done?'" Bowen said. "There is, I would submit, in the Martin report, no evidence to that effect."
The withdrawal in September 2004 of Vioxx, a $2.5 billion-a-year seller, sent Merck shares tumbling, drew investigations from U.S. authorities and prompted sharp criticism of a pharmaceutical company known for its sterling scientific reputation.
Although Merck shares have largely rebounded, the company continues to face federal probes involving Vioxx and more than 14,200 product liability cases. So far, the company and plaintiffs each have four victories.
The report found no member of Merck management tried to mislead scientists or consumers. It also said there was no support for assertions Merck propelled Vioxx to market without conducting necessary testing. And it rejected claims Merck scientists ignored signals the drug caused heart problems.
The report said it was "worth noting" that several Merck employees were taking Vioxx at the time of its withdrawal. They included its former top scientist, Edward Scolnick, and its general counsel, Kenneth Frazier, as well as the wife of former Chief Executive Raymond Gilmartin and the mother of research chief Peter Kim.
In a negative finding about the company, the report said "certain individuals" in marketing and sales "engaged in practices that were inconsistent with Merck's policies and at times proposed neutralizing critics through means that senior management viewed as unacceptable."
The report criticized some Merck interactions with academic scientists who raised questions about the company and Vioxx. Another criticism involved the use of a promotional aid by sales representatives that failed, on its own, to provide all of the available cardiovascular data on Vioxx.
Bowen said the board also would be working with the company to ensure that further scientific press releases would be clearer, following findings that some press statements involving Vioxx could have been read ambiguously.
The report "raises some questions," Bowen said. "It's up to management now to take advantage of this process."
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