Stakeholder Responsibilities in Consumer Protection
Part A: Unauthorized Immigrant Workers at Chipotle Mexican Grill Restaurants
The inclusion of unauthorized immigrants is a form of workplace diversity. In reference to the Chipotle Mexican Grill Case, the hiring of immigrant workers shows how diversity plays a role in the business world. The difference with other forms of workplace diversity, such as the consideration of racism, sexism, and ethnic discrimination, among others, can be observed.
Being an unauthorized immigrant creates workplace diversity. According to Yang (2019), several organizations are seeking to adopt policies aimed at securing oversees human resources. For instance, the Japanese government adopted a policy aimed at securing oversees human resources because companies and industries are working towards ensuring that foreigners contribute towards their government policies (Yang, 2019). Cultural diversity is brought by immigration, whether it is authorized or not. For instance, Yang (2019) notes that the cultural diversity that comes with the workforce is more beneficial than keeping native workers.
Merck, the FDA, and the Vioxx Recall.
Introduction
Merck & Co., Inc. is a pharmaceutical company that is research-driven and operates globally. Merck’s roots can be traced back to 1668 when Fredrick Jacob Merck opened a chemical company in Germany. By the 1930’s, Merck had relocated to New York and began conducting pharmaceutical research. As a global pharmaceutical company, Merck sells its products in more than 200 countries and employs about 70,000 people.
Merck, through its research facility, developed Vioxx in 1994 to reduce inflammation and pain in the human body. Vioxx, which is generically referred to as rofecoxib, falls under a class of drugs known as Cox-2 inhibitors and competes with another category of drugs, usually referred to as nonsteroidal anti-inflammatory drugs (NSAIDs), which are normally utilized for the same purpose of reducing pain. In 1999, the United States Food and Drug Administration (FDA) approved Vioxx for the treatment of inflammation, pain, and stiffness arising from arthritis. It was later approved to be used to treat rheumatoid arthritis in both adults and children. It was also found to be beneficial in the treatment of gastrointestinal bleeding and ulcers.
However, after several tests and trials, Vioxx was found to be associated with cardiovascular risks. Because of the risks, Merck’s executives decided to withdraw the drug. The withdrawal of the drug from the global market was announced in September 2004. This paper will critically assess if Merck acted in a socially responsible manner concerning its customers and shareholders, marketing and advertising, and to government policymakers and regulators concerning the development and withdrawal of Vioxx.
Was Merck Socially Responsible concerning the Development and Testing of Vioxx?
Initially, Merck enjoyed a high reputation in ethical standards as a pharmaceutical company. For instance, Culp and Berry (2007) note that Merck’s values/mission statement stresses that “business is preserving and improving human life.” Also, Culp and Berry (2007) argue that Merck had lived up to the ideals of its mission statement. However, on the withdrawal of Vioxx from the global market, numerous questions on the ethical and social responsibility of the company have emerged. Even though Kenneth Frazier, the company’s general counsel, noted that they acted responsibly by withdrawing the drug, Krumholz, Hines, Ross, and Egilman (2007) point out that, even in the early development of Vioxx, Merck had been advised by several scientists that the drug might have adverse effects on the cardiovascular system in human beings.
For instance, Krumholz et al. (2007) note that Merck had sponsored a study in 1996-7, which reported that rofecoxib largely decreased the urinary metabolites of prostacyclin by about a half in healthy volunteers. The findings of the study were revealed through internal e-mails, which were made public in the process of litigation. However, Merck had sought to soften their interpretation of the findings, which stated that cyclo-oygenase-2 (COX 2) inhibition in the vascular endothelium could increase the chances for thrombus formation, which formed the basis for the FitzGerald hypothesis. The changing of interpretation can be viewed as unethical and that Merck did not act in a socially responsible manner. Furthermore, the studies which were conducted by Merck were not designed to evaluate any risk of cardiovascular disease. Krumholz et al. (2007) argue that, although the studies were not aimed at evaluating the effects of the drugs on cardiovascular disease, the company was aware that it had the potential to increase thrombus formation, which increases the chances of cardiovascular disease.
However, in its defense, Merck claims that it acted responsibly by withdrawing the drug voluntarily. According to Culp and Berry (2007), Merck claimed that it did not hide reliable information regarding the side effects of Vioxx. He added that it had no credible scientific information that Vioxx increased the chances of cardiovascular disease until September 2004 when there were clinical trials designed to investigate whether the drug had the potential of preventing colon polyps. This, the drug increased the risk of stroke and heart attack among its patients.
Even though Merck did not hide credible information, it can be argued that it did not act responsibly, especially considering that the company was aware of potential side effects, but failed to carry out thorough investigations. According to the company’s documents, Culp and Berry (2007) note that the company’s executives and researchers were worried about the potential side effects of Vioxx in November 1996, two years before selling the drug. Furthermore, marketing issues arose because Vioxxx could not easily compete with preferred drugs in the market, such as ibuprofen or aspirin. Nonetheless, the company proceeded to produce Vioxx without conducting enough trials to ascertain the side effects of the drug, as noted by Culp and Berry (2007). Based on these reasons, it can be concluded that Merck did not act responsibly in the development of Vioxx.
Did Merck Act Socially Responsible with regard to Vioxx in its Relations With Customers and Shareholders?
On September 30, 2004, Merck announced that it was withdrawing Vioxx from the market. This withdrawal had far-reaching effects on customers and the company’s shareholders. Merck’s mission statement, which is “to work towards satisfying customers while also benefiting humanity,” was not adhered to. First, customers suffered hugely, while others died as a result of the side effects of Vioxx. For instance, Rothoff (2007) notes that a lawsuit which was filed by Carol Ernst’s wife, after his death from a heart attack, and which was attributed to the use of Vioxx as a form of painkiller, indicates how some customers suffered from the drug. Besides, Merck agreed to pay over $650 million to victims of the drug, thus indicating the extent of the negative effects of Vioxx across the world.
Based on the evidence produced by various journals, it is clear that Merck downplayed the serious side effects associated with the use of Vioxx in its VIGOR study. According to Holmes (2005), Merck failed to undertake enough trials to determine whether Vioxx was actually increasing the risks of heart disease. When studies further proved that Vioxx increased the risk of cardiovascular diseases, most customers were confused because they were uncertain whether they were also at risk (Holmes, 2005). Even though Merck acted quickly to recall the drug, its choice to downplay the side effects, which had apparently been raised, shows that the company did not act in a socially responsible manner to its customers.
Additionally, Merck failed to inform physicians about the potential side effects. If Merck had informed physicians that Vioxx increased the risks of strokes and heart disease five-fold, they would have taken into consideration while prescribing the drug (Culp & Berry (2007). Furthermore, based on the VIGOR study, the company underreported its findings by stating that Vioxx increased the risk of cardiovascular disease four-fold rather than five-fold (Culp & Berry, 2007). Even though Merck, in her own defense, claimed that any responsible physician should have read the findings that were published in the New England Journal of Medicine, the company should have indicated these risks in their label. Culp and Berry (2007) note that most doctors rely on their salespersons while prescribing most drugs. The lack of labeling regarding the risks shows that Merck did not act in a socially responsible manner to its customers.
Shareholders were also greatly affected by the recall of Vioxx. According to Holmes (2005), the recall of Vioxx negatively affected the stock market, and Merck lost more than $28 billion, which accounted for about 27% of its market capitalization. Merck had also invested heavily to market Vioxx. For instance, in 2003, Merck spent about $500 million to promote Vioxx, which attracted many customers. Holmes (2005) notes that the promotional activities did not only drive the drug’s demand, but it also changed the perception of doctors to believe that it was a better pain reliever. This popularity, together with the company’s act to downplay the side effects, shows that the company was not socially responsible to its customers and shareholders.
Even though Vioxx was initially a success to the company as it made significant profits, the lawsuits, which were later filled, have been a huge loss to shareholders. According to Rothoff (2007), Merck incurred a loss of about $26.8 billion after deciding to withdraw all Vioxx drugs in the market. When the Wall Street Journal published an article that claimed that the company’s executives were aware of the risks associated with the drug but had chosen to downplay it instead, Rothoff (2007) notes that Merck’s stock price fell by 9.7%. This shows that the company’s executives failed to act in a socially responsible manner by failing to inform its shareholders of the risks associated with Vioxx and the potential financial implication that it might have on the company.
Did Merck Act Socially Responsible With Regard To Vioxx In Its Relationships With Government Policy Makers And Regulators?
On the issue of Vioxx, several ethical questions have been raised regarding the development and promotion of the drug by the company and how it is related to government, policymakers, and regulators. For instance, Holmes (2005) notes that FDA had accused Merck of carrying out a promotional campaign even when serious issues regarding effects on cardiovascular issues had been raised. In addition, The Lancet, a leading drug research organization, had also raised questions regarding the use of the drug after it had carried out various studies and found that the side effects of Vioxx were far-reaching (Holmes, 2005). As a result, the promotion and marketing of the drug without proper trials and adherence to regulations shows that Merck was not socially responsible to the government and other regulators.
Based on the results of the VIGOR study, which were later submitted to the FDA in 2001, Merck received warnings from the regulator. The warning insisted that Vioxx was five times more likely to cause cardiovascular diseases when compared to NSAID drugs (Kondro, 2006). However, Merck continued to sell the drug until 2002 when they started to include a warning sign indicating the risks associated with the use of the drug. Furthermore, the New England Journal of Medicine also reported that certain data had not been reported to FDA by the VIGOR study. Besides, it was revealed during the trials that the authors of VIGOR study had the data years before they published them (Kaur, 2018). The editor of VIGOR study accused the authors for withholding the data in their publication (Kaur, 2018). Although Gregory Curfman claimed that the quick release of the findings was as a result of the need to avoid media misinterpretation, he had denied that any data was withheld. This indicates that Merck did not act socially responsible to FDA, the regulatory body.
What’s more, because Merck wanted to comply with the Data and Safety Recommendations Monitoring Committee, it decided to have an advanced early “cut-off point” in its research. According to Kondro (2018), the researchers who were involved in the VIGOR study fixed an early “cut-off” date for the trials even before the events occurred. The early cut-off, according to Kondro (2018), has been of great concern because the results of the study might have been largely affected. Kondro (2018) notes that the findings of the VOGOR study indicated that Vioxx had a lower chance of causing gastrointestinal problems when compared to earlier anti-inflammatory naproxen. These findings were disputed by Bombadier’s academic group, noting that the researchers failed to follow the “appropriate clinical trials principle.” By failing to follow the standard clinical trial procedures, it can be concluded that Merck did not act in a socially responsible manner to the government, policymakers, and regulators.
Whilst Merck claims that FDA had reviewed the data and was aware of the risks associated with cardiovascular disease, the regulatory body noted that the company had manipulated the data. Furthermore, the FDA review board also noted that EKG tests were also manipulated with the aim of excluding high-risk factors regarding their trial subjects while also changing the results, three months earlier before publication. Holmes (2005) notes that Merck failed to work together with FDA in the development and promotion of the drug. These events further show that Merck was not socially responsible to the government, policymakers, and stakeholders.
Was Merck’s Public Recall of Vioxx an Act of Corporate Social Responsibility?
Merck voluntarily withdrew Vioxx drug from the worldwide market on September 30, 2004. The withdrawal was based on the findings of APPROVe study, which was carried out by Merck and the findings by FDA supporting previous suspicions that the drug increases the risk of cardiovascular disease to its users. It was estimated that Vioxx had probably caused about 100,000 heart attacks, to which about 40% were fatal. According to Kaur (2018), Merck acted in a socially responsible manner by promptly withdrawing the drug from the market based on the findings of its own studies and those of FDA. In addition, the withdrawal of Vioxx from the market was informed by the findings that, although there were minimal chances of an individual patient from dying from a heart attack, it had a significant impact on the general population. Besides, Culp and Berry (2007) note that Merck was not obligated to hand over its internal findings to FDA on the risks associated with the drug. By voluntarily submitting the findings of VIGOR to FDA, Merck acted responsibly.
Merck also informed the media about its VIGOR findings; thus, it acted responsibly. Culp and Berry (2007) further argue that, in April 2002, Merck was requested by FDA to label the drug with a warning on its potential risks to which the company complied. While defending itself, the company also argued that there was no drug without any potential risks. Even though Culp and Berry (2007) notes that Merck was not socially responsible because it sold the drug even though it had information two years before, the company voluntarily agreed to label the drug with a sign indicating its potential risks.
In addition, further findings by FDA advisory board have supported the return of rofecoxib to the market. This decision is based on the argument that the drug’s benefits outweigh its risks. The FDA board notes that the risks of heart attack for patients using Vioxx are almost similar to those of other drugs, such as ibuprofen (Culp & Berry, 2007). Moreover, FDA had initially approved the use of Vioxx to reduce pain in patients suffering from osteoarthritis and for the treatment of menstrual pain (Culp & Berry, 2007). Even though Merck has been accused of failing to conduct enough trials despite the company’s executives raising concerns regarding the potential risks, it can be seen that Merck acted in a socially responsible manner by voluntarily accepting to withdraw the drug in 2004.
Conclusion
Merck has enjoyed a good reputation in the United States and across the globe. However, the choice by Merck to withdraw Vioxx from the market has raised numerous ethical and social responsibility questions. The way in which Merck conducted clinical trials, collected, stored, analyzed, and reported data on its findings regarding Vioxx has also been questioned. Various researchers have come to the conclusion that Merck did not follow the right procedures while conducting its trials. One of the main concerns is that it created an early cut-off for its clinical trial even before they began. Additionally, the company failed to disclose its actual findings to FDA and other regulators. Furthermore, Merck continued to sell Vioxx even though it had prior knowledge that it increased the risks associated with stroke and heart disease. Nonetheless, it can be concluded that it was socially responsible in the way in which it chose to voluntarily withdraw the drug from the market.
References
Culp, D. R. & Berry, I. (2007). Merck and the Vioxx debacle: deadly loyalty. Journal of Civil Rights and Economic Development, 22(1). 1-34. Retrieved from https://scholarship.law.stjohns.edu/cgi/viewcontent.cgi?article=1054&context=jcred
Holmes, P. (2005). Merck’s Vioxx scandal highlights pharma ethics issues. Provoke. Retrieved https://www.provokemedia.com/latest/article/merck’s-vioxx-scandal-highlights-pharma-ethics-issues
Kaur, P. (2018). Merck and river blindness: a case study in ethical dilemma. International Journal of Academic Research and Development, 3(1): 218-220. Retrieved from www.academicsjournal.com
Kondro, W. (2006). Dispute over Vioxx study plays out in New England Journal. CMAJ 174 (10) 1397; DOI: https://doi.org/10.1503/cmaj.060433
Krumholz, H. M., Hines, H. H., Ross, J. S. & Egilman, D. S. (2007). What have we learnt from Vioxx? BMJ Publishing Group Ltd. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1779871/
Rothoff, K. (2007). Product liability litigation: an issue of Merck and lawsuits over Vioxx. All Dissertations. 63. Retrieved from https://tigerprints.clemson.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1063&context=all_dissertations
Yang, L. (2019). Cultural diversification through employment of foreign workers: benefiting firms and cities. Retrieved from https://www.rieti.go.jp/en/columns/a01_0463.html