The Recall of Vioxx

Vioxx was an anti-inflammatory drug used to treat arthritis and acute pain without the stomach irritation caused by other non-steroidal anti-inflammatory drugs (NSAIDs).³ The decision to recall Vioxx was expected to cost Merck $2.5 bn in revenues as it was the second largest selling drug next to Pfizer's Celebrex in the category known as Cyclooxygenase (COX-2) inhibitors.⁴ Vioxx was launched in May 1999. According to Merck's estimates, between May 1999 and August 2004, about 105 mn prescriptions were written for Vioxx in the US. The drug had been taken by 84 mn people worldwide since its introduction and at the time of its recall 2 mn people were using it. Soon after the announcement of the recall, Merck's share price fell by 27% from $45.07 to $33 per share, wiping out $28 bn in market value.

Ever since its launch, medical experts had raised doubts about the cardiovascular risks associated with Vioxx's usage. Over several years following its launch, various reports published in medical journals and media have raised concerns about the risk of heart attack being linked to the usage of Vioxx.

However, Merck disagreed with all the reports until its own internal study suggested cardiovascular risks if Vioxx was used for more than 18 months. Reacting to the withdrawal of Vioxx, Steven Galson, acting director of the FDA's Center for Drug Evaluation and Research said, "We have been concerned and aware of the potential for cardiovascular effects for the last few years, and this is not a total surprise"⁵...