Case Study Report on Merck, the FDA, and the Vioxx Recall

According to Weber and Lawrence, the meaning of corporate social responsibility is” a corporation is responsible for all its actions which affect the environment, communities and people” , and management is responsible for all its stakeholders in all criteria which include some risk factors and also beneficial for the organization. On the basis of this definition, merck completely refuse for the act of catastrophically in a manner for testing and developing vioxx, as company not only failed to make its customers who support in need and risk with their actions but they also fail to perform harming many customers lethally or to make sure about the harmed lethally about any product which not going to buy.  In 1997 during the early stages of development of vioxx many dangerous shortcoming going to be discover when it is going to be discovered that it is very serious and dangerous side effects of medicine on heart and blood. After searching the side effects of vioxx, different decision making personnals and Merch’s research directors learn about the risks of it. But when the company going to realize about the side effects , it perform no any action for improving the formula of medicine nor disclose this information to general public. And the most important and dark side of this issue is that Merck did not agree on mention this problem on medicine and try to avoid follow the instructions of FDA which may affect the life of their customers in bad manner.  

Good corporate governance and corporate social responsibility is transparency related to all issues. As per Ticoll and Tapscott, the real ethical value of company is transparency and if company not does this, it will perform unethical actions. Merck has no social responsibility and poor governance as it not do any action on development of transparency related to vioxx. And the most important thing is that Merck consider all the development issues of vioxx are ordinary instead of life threaten products which shoe their unethical and socially irresponsibility.       

If we talk about the pharmaceutical company, it is very important as it directly affects the health of people and its customers are facing health issues. So it’s the major responsibility of all pharmaceutical companies specially MERCK to accomplish their social responsibility and must have effective governance to operate socially responsible manner. In case of vioxx, we see that company not perform their social responsibility and its management also not perform any action related to responsibility especially when it affect the society in harmful manner. During the development of vioxx, we see that MERCK also try to minimize their responsibility and accountability related o stakeholder’s risk related to lethal risks belong to customers.

According to my point of view, the main reason behind the irresponsible behavior of Merck during the development of vioxx is the financial issues and its research activities not economical manage by company.       Although, life threatening effects also present in the vioxx but Merck also concern about its millions of dollars which they invest in the development of product and hide the safety issues of vioxx is more important for company instead of many human lives and company is more concern about its reputation and development cost which is going to be lost after expose all the defects of vioxx in front of government and media.             

Social responsibility issues regrading relations with customers and shareholders

According to Weber and Lawrence, it is the social responsibility of all business to protect the customers during providing all the services and goods at their required price. So with customers, the standard of social responsibility is related with providing all goods and services at their required price with proper safeguard. But, Merck show very irresponsible and unethical manner related to all these standards which are important for the safety of customers and product quality related to vioxx.

Social responsibility of company related to safety of customers and product is main thing but Merck only concern about its profit and move the product into market while knowing that its product may kill its customers. As per case text, the price of vioxx is almost $3.00 equivalent to aspirin and Advil medicines. We can say that Merck not only provide harmful product instead also at so much reasonable price that everyone can easily afford it. As we discuss earlier Merck try to provide less awareness related to risky product and provide the product to its all customers in a huge quantity which is harmful for their lives and not clearly mentioned all the dangerous instructions on the product.

Also explain in above discussion that Merck didn’t use transparency and this happen with all their customers, external stakeholders and also with shareholders through not providing them true and fair information until they supply their product to the market. We see that the management and research and development areas are not sincere with the shareholders and didn’t want to keep in touch for long terms as after releasing the harmful product they didn’t maintain their relation with them. Management and research and development personals know about the problem in product and also know about economic and share price loss related to shareholders but they still move the product into market and show their poor responsibility towards shareholders.

Social responsibility issues regarding to the marketing and advertising of Vioxx

In online texts, we study that related to health and safety issues of product is very much important to disclose all information and advertise truthfully as it is important for consumer protection and related to product and labeling ingredients it is important to present all the healthy and safety issue information. Related to vioxx, Merck also hide its all side effects and try to avoid mention all the safety instruction on the product for providing awareness to customers. For its personal benefits, Mreck directly advertise its product to customers without mention the bad effects of product and for this purpose it spend hundreds of millions. So, Mreck act as very irresponsible for the advertising and marketing of vioxx.

The problem related to direct advertisement is that information is transfer from customers to pharmaceutical companies in a proper way. All professionals and doctors know about all the effects of medicine and not give wrong or incomplete information to users which sometimes missing in advertisement commercially. Normally, consumers have no professional knowledge about the medicines and get easily trapped in the direct advertisement case by considering that this medicine have little bit effects or may not any effect.  But according to advertisement point of view, this direct  to consumer advertisement is not suitable specially for those type of medicines who have some hard and dangerous side effects related to consumers and that thing not mention on the products.

Another problem is that Merck make its product as Blockbuster model and engage different doctors illegally to advertise their [product unethically against high charges. These type of promotion and marketing activities include different financial and educational benefits given to doctors against wrong product promotion and huge financial support given to doctors who give their medicines to more and more patients. All these promotion activities are illegal and socially irresponsible as they force doctors to only concern about their personal benefits and not even think about their patients. In mention case, in 2003 Merck utilize almost $422 million for the advertisement of vioxx between doctors and hospitals. This is the major responsibility of all the doctors and hospitals to be sincere with their patients by through the influence and financial support of pharmaceutical giants, they become economical greedy and only concern about the financial benefits which they get from such companies. It seems very bad that when millions of people want medical help , such type of companies spend millions of dollars for advertisement of wrong product through wrong ways and this vioxx example of Merck company is a major example of socially irresponsible and unethical practice.

 Social responsibility issues regarding Vioxx in its relationships with government policy makers and regulators

Merck and many other such type of companies also use millions of dollars to get the favor of retire politicians and policy makers who are part of some legislating bodies or government agencies and such activities also include in social irresponsibility and unethical manner.

We study in different modules that the role of government is to protect the vulnerable participants related to market by promoting the social welfare and economic growth in economic and social system. In case of pharmaceutical giants, the consumers are considering as vulnerable participants in a huge market of medicine. In such cases when these type of companies spend many millions in influencing the government instead of helping activities for poor people who need great medication and government also influence by such companies then the protection of patients and welfare system of government is going to be weak and making economic and social system more unethical.

In the case text, Merck also influence FDA for not mentioning the side effects on product and also  stop scientist to present this issue in front of all. A business that is socially responsible must protect the interest of its shareholders and stakeholders. But Merck failed to keep secure the interest of its stakeholders and also influence different government sectors to help them in hiding this fault from stakeholders and also hide the harmful effects of vioxx from all of its customers and users. And when FDA face many serious issues related to side effects of vioxx and ask Merck about mentioning on product it’s all effects in 2002, Merck refuse to corporate with FDA who protect the interest of all patients and general public. Instead Merck try to provide such type of wrong and faulty information to all its stakeholders which secure the economic condition of company and not mention proper labeling on the product. And after huge advertisement, vioxx going to market and company make huge profit due to wrong advertisement.

Merck's voluntary public recall of Vioxx

Merck perform many actions d activities which are unethical and socially irresponsible for the customers and economy, and with huge marketing and advertisement activities they increase its sales and influence many government agencies related to vioxx development and after sometime provide only some little information about the side effects of vioxx. But after sometime, Merck present the side effects of medicine in front of all and show how much this product harful for the users. Some reasons behind this recalling are:

Merck want to keep tie some of its stakeholders who are very important for the company and having a huge reputation in the market. All customers, family members, shareholder sad n general public are important for the company and they don’t want to lose their trusts. And they are badly affected with the wrong advertisement and poor product promotion of company.

Merck also recall the vioxx as they know that the interest of stakeholders is more important than the interest of company and they want to accept the loss of hundreds of millions related to economy and many legal and ethical laws they were broken due to their personal interest. This decision is not as easy as it seem because they have to face a lot of problem and loss related to financial issues and also related to their reputation.

The recall of Merck also show that pharmaceutical companies must concern about the social and ethical responsibility related to society and all their patients. They must follow their social and ethical responsibility and also concern related to health factors of all their customers and patients. Company wants to reveal all the side effects of vioxx and they want to maintain the trust of their customers and their stakeholders on the company. Merck has to show their social and ethical responsibilities which are important for their economic and social reputation.