Merck Organization and Its Operational Problems

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Introduction

Merck and Co. Inc. is considered one of the largest pharmaceutical companies in the world market. It is a multinational pharmaceutical company involved in discovering, developing, manufacturing, and marketing drugs for both human and animal consumption (Merck & Co. Inc., 1999). Most of the products from Merck are used in hospitals and clinics and at the same time sold to governments through a network of pharmaceutical sales representatives. The company has elaborate innovative research approaches comprising of modern technological applications and personnel strongly committed towards identification and satisfaction of patient needs.

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Company’s products, services, consumers, and sources of revenue

Merck & Co. Inc. is one of the largest pharmaceutical companies deals with a wide portfolio of drugs. The portfolio comprises Vioxx, which is one of the most important drugs manufactured by the company and used as a painkiller in the treatment of arthritis. Other drugs within the company’s portfolio include; Zocor and Mevacor used in modifying cholesterol levels. There are those used in the treatment of hypertension such as Cozaar, Prinivil as well as Vasotec, also antibiotic drugs such as Primaxin and Noroxin, Pepcid used in the medication of ulcers, Crixivan used for the treatment of HIV disease, drugs used for the treatment of glaucoma, asthma and several vaccines such as Varivax used for chickenpox and Recombivax HB used as hepatitis B vaccine (Merck & Co. Inc., 1999).

The company utilizes joint ventures for purposes of reinforcing its manufacturing and marketing processes. A good example involves Merck’s partnership with Johnson & Johnson which focuses on designing and commercializing drugs and medications used over-the-counter. Other partnerships include that with Aventis A.G. concentrating on the vaccine and animal health market. A higher percentage of revenues obtained by Merck is purely generated from various pharmacies operated by the company such as Merck-Medco Managed Care. The various pharmacies sell drugs at the retail level hence serving consumers with drugs as per their prescriptions. The company invests much in research and development and spends over two billion US dollars annually on research and development. However, close to over40% of the sales revenue is generated from sales done in the international market i.e. from countries outside the United States (Merck & Co. Inc., 1999).

Analysis of the operational problem

Withdrawal of Vioxx drug from the market by Merck Company took place in the year 2004. The withdrawal was done as a result of complaints received from patients and bodies dealing with consumer safety and risks based on the excessive risk of heart attack and stroke. In the year 2000, the New England Journal of Medicine revealed the results from the Merck trial where patients using Vioxx were recorded as having high chances of contracting heart attack or stroke compared to those using other painkiller drugs such as naproxen. Consequently, a study done by Cleveland Clinic researchers raised cautions over the risk of cardiovascular complications arising from the use of Vioxx, this was published in the Journal of the American Heart Association (Topol, 2004). These events led Merck to withdraw the Vioxx drug, four years after its introduction into the market.

After approval by FDA granting Merck Company the right to market Vioxx, the company had to undergo several processes for the purposes of developing, testing and confirming the approval on the authenticity of the drug. Merck began by clinical trial in January 1999 where they had to prove the fewer side effects on those taking the drug. They had to prove that Vioxx caused fewer gastrointestinal problems compared to those drugs already in the market such as naproxen. However, the body which monitored the trial, Data Safety and Monitoring Board (DSMB), identified some shortcomings in using the drug within the third month of the trial process. The problem was associated with high risks of cardiovascular events. Despite such clear warning signs from the conducted research, Merck Company decided to ignore such signs hence continued with their process of marketing the drug after which they finally withdrew on the basis of heightened concern within five years period (Presley, 2006).

The above explanation illustrated the situation on competing understandings of mission across several organizational departments. Such difficulties made it impossible on the issue of regulating drug safety within the market context. Merck had been very successful in its bid of marketing the Vioxx drug to physicians. The marketing and sales team remained focused on their mission of promoting company products and sensitizing consumers concerning new drug products (Presley, 2006). This shows that despite problems within such an organization, each division normally proceeds with its mandate irrespective of problems within some sectors until sensitized. In this case, the marketing and sales team had an elaborate understanding of ways and means of meeting responsibilities. By the year 2000, a review by DSMB revealed that there were several pulmonary deaths and cardiovascular events of which was not given much attention (Weick and Sutcliffe, 2001).

Marketing of Vioxx

Another problem arose when Marketing and Sales team released inappropriate information to their sales representatives concerning the effects of the Vioxx drug. The release included detailed messages with information to salespeople regarding ways of answering questions posed by physicians concerning already published results on cardiovascular events. The marketing team made such a quick move for the purposes of preparing sales representatives making them not appear ill-prepared for questions within the field. The marketing and sales department conspired on improving Vioxx’s image by excluding VIGOR trial results normally appearing on the drug information cards. They instead provided inappropriate safety analysis which was not approved by FDA. The information encouraged the use of Vioxx by indicating that it was by far safer than other anti-inflammatory drugs on the market.

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The marketing and sales department further trained their sales force for the purpose of preparing them towards reframing any emerging issues surrounding the Vioxx drug. At the same time, they developed the ‘Obstacle Response Guide’ which acted as a reference manual for sales representatives and detailed likely questions to be asked in the field as likely responses. This was a marketing tool used in the process of promoting the Vioxx drug to physicians within the market. They focused on the strengths and minimized any safety concerns from consumers and research bodies. Additionally, they utilized press releases in an attempt to provide efficient messages concerning Vioxx (Bazerman and Watkins, 2004).

There was a need of cultivating an information culture capable of recognizing as well as responding to unexpected shortcomings such as the chemical composition of such drugs as Vioxx. The organization failed to observe five information priorities that focus on analyzing possibilities of failure, effects of complacency, and negative experiences. They ignored the complex nature of the world which requires elaborate interpretations and a complete nuanced picture of the ongoing events within international and domestic markets (Weick and Sutcliffe, 2001). This led to the withdrawal of their attention from the frontline segments comprising of marketers and salespeople, hence the anomalies could not be easily tractable and isolated on the ground. Merck did not put in place necessary principles which could help them detect, contain and bounce back from such effects since the drug in question was extremely selling within the market (Bazerman and Watkins, 2004).

The development of vigilant information culture is necessary for the purposes of maintaining clear reflections on safety and risk. However, the current market environment makes organizations focus more on competitive pressure and economic inclinations rather than safety (Bazerman and Watkins, 2004). It is the responsibility of senior management to enforce vigilance and safety hence making it an organizational priority. There is a fundamental need of creating an alert information culture with the ability to scrutinize existing assumptions on safety and failures (Bazerman and Watkins, 2004).

Co-operate Responsibility

Executive management from Merck Company was slow in responding to clinical trial results. The executives involved in the clinical studies took a long time to make decisions on emerging safety risks raised by VIGOR (Vioxx Gastrointestinal Outcomes Research) trial and strategic benefits brought by Merck’s top-selling drug (Berenson et. al., 2004). The plight of stakeholders as per the corporate mission was held by Human Health Product Approval Committee (HHPAC). This is because HHPAC witnessed the process of development of Vioxx at Merck Company and also represented the reliable bridge between segments such as Research & development and commercial sectors within Merck Company (Lovallo and Kahneman, 2003). HHPAC failed in its mandate to interpret explicit results from VIGOR and present it to stakeholders while DSMB (Data Safety and Monitoring Board) performed its responsibility by realizing credible results from the clinical trials. However, the future of Merck with Vioxx drug fully depended on two sectors within the company. These were the research division and the commercial division comprising of Marketing and Sales departments (Berenson et. al, 2004).

Those heading concerned departments conspired on how to reframe the clinical trial data for presentation to media and academic journals. Despite being aware of side effects such as cardiovascular events, they focused on portraying Vioxx within the market’s favorable light by making the best of raw data originating from the raw data. According to the results, there were increased cardiovascular complications arising from those patients taking Vioxx. One such explanation was based on the fact that naproxen which is one of the drugs within the market provided patients with adequate protection of the heart, an idea not fully proven through clinical trials. However, the naproxen hypothesis provided the best platform on which Merck could explain reactions behind cardiovascular events (Boin and Lagadec, 2000). The marketing and Sales department focused on their consistent goal of developing clear marketing strategies while at the same time, they continued with further clinical trials. However, the continued trials further revealed additional safety risks associated with the Vioxx. This made Merck Company perform a series of tests before withdrawal trying to find out whether Vioxx could be used for the treatment of unrelated diseases (Choo, In press).

Conclusion

The events that took place before Merck Company finally withdrew Vioxx from the market reveal how most organizations incubate disasters over longer periods of time giving an opportunity to accumulate errors and warning signs. Despite such signals becoming clear from the onset of processes, most organizations lack the capability of developing appropriate remedies before such conditions result in failures. This report analyses and reveals the theoretical basis under which such disasters occur hence giving information practices that can enable reduction to such catastrophic outcomes. However, in some instances, signals are usually ignored owing to the fact that they are at times not consistent with organizational culture, belief as well as aspiration. Management normally views such events as part of the business processes hence allowing the problem to accumulate resulting in a disaster.

Bodies endowed with the responsibility of looking into health concerns failed in this case to develop Coordinated Health models comprising different areas crucial to health and learning. Such models should have incorporated collective strategies as well as activities capable of promoting health aspects within the company’s research and development sectors. Such a model should guarantee the involvement of companies, various stakeholders as well as the communities concerned with health provision programs. Such involvement ensures adequate commitment and support from the international community which is considered valuable input. However, several health concerns exist among children and adults within the United States. This calls for adequate identification and tackling of such health problems through the involvement of social service agencies, health care providers as well as religious and educational organizations within the American community. Health concerns surrounding the manufacture of drugs are one of the key issues requiring attention within various world markets. Efforts geared towards supporting population health are prevalent within many nations. On the same note, there is a great need in supporting legislative laws geared towards supporting healthier populations. There is a need to acquire accurate and local information concerning health care for the purposes of enriching the population’s health status as well as well-being. However, such information should be provided by authorized bodies due to the authenticity required. They seem to have significantly new pieces of evidence concerning the world health status.

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References

Bazerman, H & Watkins, M 2004, ‘Predictable Surprises: The Disasters You Should Have Seen Coming, and How to Prevent Them,’ Harvard Business School Press, Boston.

Berenson, A., Gardiner H & Andrew Pollack, A 2004, “Despite Warnings, Drug Giant Took Long Path to Vioxx Recall,” The New York Times, Web.

Boin, A & Lagadec, P 2000, Preparing for the Future: Critical Challenges in Crisis Management, Journal of Contingencies & Crisis Management, Vol. 8, No. 4, pp185-191.

Choo, C. W (In press), The Knowing Organization: How Organizations Use Information to Construct Meaning, Create Knowledge, and Make Decisions (2nd ed.), Oxford University Press, New York.

Lovallo, D & Kahneman, D 2003, “Delusions of Success: How Optimism Undermines Executives’ Decisions,” Harvard Business Review, Vol. 81, no. 7, pp 56-63.

Merck & Co. Inc 1999, “The History of Merck,” Web.

Presley, H 2006, Vioxx and the Merck Team Effort, Case Studies in Ethics, Web.

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Topol, J 2004, Failing the Public Health: Rofecoxib, Merck, and the FDA, New England Journal of Medicine, Vol. 17 No. 351, pp.1707-1709.

Weick, K & Sutcliffe, K 2001, Managing the Unexpected: Assuring High Performance in an Age of Complexity, Jossey-Bass San Francisco.

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