Merck Pulls Vioxx Painkiller
From Market, and Stock Plunges
September 30, 2004
By TERENCE NEILAN
Merck & Company announced today that it was immediately
pulling its arthritis and acute pain medication Vioxx from
the worldwide market after data from a clinical trial
showed that the drug produces an increased risk for heart
attacks and strokes.
"We are taking this action because we believe it best
serves the interests of patients," Merck's chairman,
president and chief executive officer, Raymond V.
"Although we believe it would have been possible to
continue to market Vioxx with labeling that would
incorporate these new data, given the availability of
alternative therapies, and the questions raised by the
data, we concluded that a voluntary withdrawal is the
responsible course to take," Mr. Gilmartin said in a
statement posted on the New Jersey-based company's Web
The recall represents a big blow for Merck, with Vioxx
accounting for $2.55 billion in sales in 2003. Merck's
shares plunged at the opening bell on the New York Stock
Exchange this morning, falling more than $12, to as low as
$32.46, and closed only slightly higher, at $33, down
$12.07, or 26.78 percent on the day. As a result, the
company's market capitalization was reduced some $25
Shares of Pfizer, maker of Celebrex, Vioxx's main
competitor, surged $1.24, to $31.25, at the opening, but
gave up most of that gain to close at $30.60, up 42 cents,
or 1.39 percent.
A Merck company spokesman, Tony Plohoros, said there were
two million current users of Vioxx worldwide and that 84
million prescriptions had been written for the drug since
Merck said the Vioxx cardiovascular risk came to light
during a three-year trial to evaluate the drug's effect in
helping patients with colon cancer. The company found that
after 18 months of treatment, patients taking Vioxx were at
greater risk for heart attacks compared with those taking a
At a news conference in New York this morning, Merck
officials said they received the data from the trial last
Friday and examined it over the weekend, consulting with
various medical experts.
Company officials informed the board of directors Tuesday
morning, and later met with the F.D.A. to inform it of
their intentions. The company then notified other
regulatory agencies around the world.
There were already suggestions of cardiovascular risks
linked to Vioxx going back to 1999, when the drug was
introduced to the American market, an industry analyst,
Barbara A. Ryan of Deutsche Bank, said.
And in 2002, the company changed the label on the drug to
include information about higher risks of heart attacks for
Vioxx patients, compared with the risk in patients taking
an older painkiller, naproxen.
The recall comes at a time when Merck's overall sales have
been sluggish, and just two years before the company is to
lose patent protection on its biggest-selling drug, the
cholesterol fighter Zocor, in 2006.
At the news conference, Mr. Gilmartin asserted that Merck
remained "very strong financially" that there would be no
need to close any plants as a result of the Vioxx action.
"We had anticipated expanding the sales forces," he said.
"This will allow us to redeploy our sales force instead of
hiring new employees."
But he acknowledged that he expected some people to leave
the company. In reply to a question, he said he would not
Mr. Gilmartin said he expected earnings per share to be
"negatively affected by 50 to 60 cents" a share, and as a
result, the third-quarter earnings estimate would be scaled
Ms. Ryan, the managing director of Deutsche Bank, in
Greenwich, Ct., said she estimated that today's action
would cost Merck "anywhere from 60 to 75 cents a share" in
earnings next year, or a drop from a forecast level of
$3.25 a share to about $2.50 or more, depending on the
company's ability to cut costs.
"Originally in our model we had net income of about $7.2
billion," Ms. Ryan said, adding that the new forecast would
result in earnings dropping to about $5.6 billion.
There is now legitimate concern about today's action being
viewed as "a black eye" for the whole class of
arthritis-pain drugs known as Cox-II, Ms. Ryan said.
But she said that the longstanding concerns about Vioxx did
not exist for Celebrex, which has been "held to the same
kind of standard and study." That suggested the same
concerns are not an issue for Pfizer, which could pick up
some of the lost Merck earnings.
Users have been told that they can stop using Vioxx with
little or no problem, and that over-the-counter drugs like
Ibuprofen are just as effective in fighting pain.
Merck officials declined today to speculate on potential
litigation against the company or the impact it might have.
Mr. Gilmartin said Merck would undertake "many pro-active
steps" to inform patients of the recall, including placing
advertisements in newspapers. Information can be found on
the Web sites merck.com and vioxx.com.
The Merck clinical trial confirmed the findings of a Food
and Drug Administration investigator who reported similar
risks with the drug in August.
The difference in heart risk was statistically significant
between a recommended dose of Vioxx, 25 milligrams a day or
less, and Celebrex, according to results that the
investigator, Dr. David Graham, presented on Aug. 25 at a
conference in France of the International Society for
The study also found that Vioxx doses in excess of 25
milligrams a day more than tripled the risk, compared with
patients who had not taken painkillers within the past two
He said his findings did not reflect the F.D.A.'s official
The acting F.D.A. commissioner, Dr. Lester M. Crawford,
said in a statement today that "Merck did the right thing
by promptly reporting these findings to F.D.A. and
voluntarily withdrawing the product from the market."
"Although the risk that an individual patient would have a
heart attack or stroke related to Vioxx is very small," Dr.
Crawford said, "the study that was halted suggests that,
over all, patients taking the drug chronically face twice
the risk of a heart attack compared to patients receiving a
At the time of Dr. Graham's investigation, Merck disagreed
with the results of the study, a spokeswoman, Mary
Elizabeth Blake, said. Conclusions from that type of
examination do not carry as much weight as results from a
study comparing two groups of patients actually taking the
medicines for a set period, she said.
Vioxx has been marketed in more than 80 countries, Merck
said. In some countries, the product is marketed under the
trademark Ceoxx. Worldwide sales of Vioxx in 2003 amounted
to roughly 11 percent of Merck's $22.5 billion in sales
"While the cause of these results is uncertain at this
time, they suggest an increased risk of confirmed
cardiovascular events beginning after 18 months of
continuous therapy," Peter S. Kim, president of Merck
Research Laboratories, said in the Web site statement.
"While we recognize that Vioxx benefited many patients, we
believe this action is appropriate."