GSBS6001 Managing Uncertainty: Vioxx Case Study Analysis - Merck

This case study analyzes the decision-making failures that led to the Vioxx crisis at Merck. It identifies the issues, including the failure to properly diagnose the side effects of the drug before its launch, the lack of collaboration within the company, and the inadequate analysis of data from the VIGOR research study. The analysis explores the causes and effects of these problems, highlighting the impact on public health, Merck's reputation, and its financial stability. Recommended solutions include improved data analysis, better internal collaboration, and a greater emphasis on patient safety. The study also touches upon the legal liabilities Merck faced and the importance of ethical decision-making in the pharmaceutical industry. Desklib offers similar case studies and resources for students.

Running head: CASE STUDY ANALYSIS
CASE STUDY ANALYSIS
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1CASE STUDY ANALYSIS
Identified decision-making issues/problems
The research studies showed that the Vioxx has been pulled off from the market as there
has been increased in the rate of heart attack, stroke and other lungs diseases for consuming their
drugs for a few days. The painkiller launched by these pharmaceuticals has been criticized by
various clinics and it has been serving more than 80 countries, thus there has been a severe effect
on the economic condition. It was Merck’s decision to launch and support the painkiller in the
market, the outcome of this decision was not predictable and it turned out to be unlucky. In this
decision, the bad outcomes are predictable by the company. There were decision-making issues
as the members of the pharmaceuticals can do the proper diagnosis before launching the drugs.
This has been found that several people were getting affected with the lungs disease after
consuming the drugs few more times and the high doses of Vioxx cause hypertension among
people (Schwartz, 2017). The decision making should be done by properly analyzing the data.
Scolnick advised and warned the team who were operating the production process to further
check out the side effects of the drugs produced by them as he already knew that there can be
side effects of such composition. Thus, this can be stated that the outcome was predicted and can
be improved on the before hands if there was proper depth analysis of the data in the trial. This is
so because in many trials at the first impression of the new interpretation of the data caused
various problems (Raghupathi&Raghupathi, 2014).
The cause and effect of the identified problems
The targets of the drugs produced by Vioxx is mainly in response to the infection or the
injury and for relieving any pain and involves the fever-inducing properties. However, after the

2CASE STUDY ANALYSIS
consumption of these drugs, it stimulates the production of a protein called tissue factor that
initiates the blood clotting. The heart attacks and strokes are often triggered by the blood clots
and the production of the tissue factor are responsible for the side effects in the human
(Thompson, Ritenbaugh&Nichter 2017). There was the problem with the functioning of the
industry only as the decision need to be taken in a collaborative manner. In an interview, the
chief executive of the company declared that the industry is not running in the right manner and
he warned that raising the price of the drugs without the medical value are turning the clinics as
well as the people against the industry. The effects of this problem are that lack of coordination
and the decision-making problems have made these reputed company pulled out from the
market. The proper data analysis was required during the development program. The research
study Vioxx Gastrointestinal Outcomes Research (VIGOR) showed a shocking result due to the
increased risk of cardiovascular disease (Raghupathi, 2016).
A decision on the root cause(s) of the identified problems
The root cause of this identified problem is that the company need to think about the side
effects of the drugs by the proper diagnosing of the results before the launching of the drugs.
Then there was a lack of collaboration in the company thus when Merck continued to plan for
more trials and studies, this VIGOR result became well known to the financial community, the
scientific community and in media. The public attention through media raised various arguments
among Merck and the outside communities regarding Vioxx. This causes the main rise of the
problems and Merck tried to propose the safety plans regarding the improvement of the side
effects caused by the drugs and also for improvement of the drug composition. This also caused
a problem in the sales of the other drugs, though Vioxx patiently waited still the withdrawal

3CASE STUDY ANALYSIS
wiped out the expected profit from the market. In that time when Merck and it introduced the
new drugs in the market was for reducing the pain and for treatment of the inflammation due to
Arthritis (Davis et al., 2018). But there was also a big impact on the sales of the newly launched
drugs and the less consumption of the Vioxx product enhance the sale of other drugs in the
market. The stock of the pharmaceutical companies slipped whereas other saw the rise of their
stock in the business market. This showed the withdrawn of the drugs produced by Vioxx after
that Merck announced that their earnings per share had been adversely affected after this. After
the withdrawal one of the biggest challenges Merck faced was the burden of the legal liabilities
(Ross &Krumholz, 2018). Several lawsuits were fielded against the Merck’s executives. Though,
Merck has announced that it would fight against each law on a case-by-case basis for insisting
that Vioxx was not responsible for all the heart attacks, strokes, and deaths that the customers
and the users of their drugs have suffered. While the firm has expected for minimizing the
payouts to plaintiffs and the experts have estimated that the settlements of each lawsuit will cost
Merck between $4 billion and $30 billion (Jasper, Leenders&O’Shannassy, 2017). This reflects
that the negligence of the executives of the company and proper diagnosing of the data results
cause such a problem. This problem can be mitigated if everybody was not being able to know
the side effects of the drugs then there will be the option for the company to make improvements
in the composition and found out the proper safety plan for the improvement of the situation
(Petersen & Singhal, 2017).
Recommended solutions to the identified decision-making issues/problems
This wrong decision-making issue raised the huge problems and its affected the health of
the users of Vioxx. This company was one of the popular brands for the pain-relieving drugs but

4CASE STUDY ANALYSIS
this massacre and the blaming of the various clinics causes the withdrawn of the drugs from the
market. When such a problem took place, the company required to provide more time and more
patience for analyzing of all the data as the proper analyzing of the data results can identify the
VIGOR research on them beforehand. There were several legal measures taken against the
executives of the Vioxx, all these can be avoided beforehand. Merck was looking for the
development program and Scolnick also warned the team members working on those drugs to be
careful while analyzing the data. It was predictable for Scolnick that any severe problems can
occur for not going through the proper data analysis. The collaboration among the members of
the pharmaceuticals needs to be improved while making any decisions the members of the
pharmaceuticals need to participate in making decisions. Every member needs to be aware of the
decision made by the company and the side effects of that decision.

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References
Davis, B., Kerr, D., Maguire, M., Sanders, C., Snapinn, S., &Wittes, J. (2018). University of
Pennsylvania 10th annual conference on statistical issues in clinical trials: Current issues
regarding data and safety monitoring committees in clinical trials (morning panel
session). Clinical Trials, 15(4), 335-351.
Jasper, S., Leenders, M. A., &O’Shannassy, T. (2017). The dramatic breakdown of the market
orientation concept in the pharmaceutical industry: lessons from Vioxx. Journal of
Strategic Marketing, 1-21.
Petersen, M. A., &Singhal, R. (2017). Vioxx: Too Risky for Merck?. Kellogg School of
Management Cases, 1-23.
Raghupathi, W. (2016). Data mining in healthcare. Healthcare Informatics: Improving Efficiency
through Technology, Analytics, and Management, 353-372.
Raghupathi, W., &Raghupathi, V. (2014). Big data analytics in healthcare: promise and
potential. Health information science and systems, 2(1), 3.
Ross, J. S., &Krumholz, H. M. (2018). Bringing Vioxx back to market.
Schwartz, M. S. (2017). Business Ethics: An Ethical Decision-making Approach (Vol. 10). John
Wiley & Sons.
Thompson, J. J., Ritenbaugh, C., &Nichter, M. (2017). Why women choose compounded
bioidentical hormone therapy: lessons from a qualitative study of menopausal decision-
making. BMC women's health, 17(1), 97.