Rational Decision Making - Too Risky for Merck – Case Study Example

This paper 'Rational Decision Making - Too Risky for Merck" is a perfect example of a case study on management. A pharmacist, Friedrich Jacob Merck, introduced Merck pharmaceutical in 1668 when he bought it as a drugstore. Emanuel Merck converted it into a drug producing company almost two hundred years later. After Emanuel’s grandson, George Merck started running the companies office in New York, Merck & Co. was formed and contributed a lot in the pharmaceutical industry with the introduction of drugs such as quinine. The years of success saw five of the company’s members of the research team win Nobel prizes. George Merck attributed the success to the values that guided the company in its method of operation in which the customer comes first, and then the profits followed. The approach assisted Merck sore to greater heights with the company occupying the leading position in the drug market for seven consecutive years.
During Roy Vagelos tenure as the Chief Executive Officer (CEO), Merck success and contribution to the field of medicine heightened. Over the years, the company followed a particular approach by choosing people with scientific experience and the necessary charisma as CEOs. However, Merck problems started when they hired Raymond Gilmartin in 1994, as the new CEO following the retirement of Roy Vagelos. Gilmartin had no scientific experience despite having an MBA from Harvard and heading Becton Dickinson & Co., a company that specialized in the supply of home and hospital care equipment for five years. This step was a poor decision by the management because there was an opportunity to promote experience from within the company, especially Dr Edward Scolnick, who acted as the president to the Merck Research Laboratories (MRL). Scolnick held the most significant accomplishment any individual in the medical field would possess by introducing twenty-nine new vaccines and drugs into the market. While Gilmartin’s approach as a business-oriented leader helped Merck in overall returns, his decisions in the manufacture and introduction of Vioxx led to the downfall of the company.
Vioxx development resulted from the need to introduce a drug for acute pain treatment for dysmenorrhea and osteoarthritis. The drug would reduce the effects associated with the drugs that were in the market at the time, which caused irritations on the gastrointestinal tract. At the time of Vioxx development, Merck was facing financial constraints in revenue after some of its major drugs in the market had expired and based on the investment made on the development of Vioxx. The issues led to the company taking a hasty approach on its research and developed Vioxx in half the time taken to introduce a drug into the market. When the company completed the safety and efficiency test for the drug, the results showed that the Vioxx increased the chances of heart attacks and strokes to the users. However, despite the warning and the responsibility to their customers, the Vioxx was released in the assumption that even other drugs already in the market caused heart attacks and strokes and therefore Vioxx was no exception (Peterson and Singhal, 2017).
The decision to release a drug and play down the adverse effects for the sake of financial gain was unethical for the pharmaceutical. The ethics governing the medical field require the company to make drugs to save human life rather than make profits (Thomas 2017). However, Merck was more interested in financial gain than on the consequences Vioxx had on the users.
Another problem facing the company during that period was management. The CEO, Gilmartin lacked the experience required to handle situations of failure in the field. When Scolnick, the experienced scientist displayed doubt in the concerns surrounding Vioxx, Gilmartin went ahead and released the drug to the public. This decision was intuitive from both Gilmartin and Scolnick who relayed on their instincts and emotions when deciding on the course of action to take (Herrmann 2017).
The Vioxx Gastrointestinal Outcome Research (VIGOR) validated the concerns against Vioxx by concluding that patients using the drug experienced and a higher rate of cardiovascular issues. However, rather than build on the discovery, Scolnick changed the narrative and directed the team of researchers to examine the long-term Vioxx relationship to strokes and heart attacks. The success of the drug in the market and the negligence in the management team led to Merck threatening to sue scientists who offered different opinions on Vioxx.
Vioxx later withdrew from the market after news of the adverse effects associated with its usage became public. However, the company could have avoided the losses suffered as a result of the withdrawal and litigations if it placed the public interest before profits as indicated by the values that guaranteed Merck success in the past. Even with the knowledge, Merck still refused to take liability for the deaths caused by Vioxx.
While the case of Merck cannot be isolated from similar scenarios from the pharmaceutical field, the issue raises concerns for the ethics in the area and that of scientists. The company continued to attach Vioxx, despite its effects on the investments made rather than on public safety. The company went ahead to instruct the employees to avoid questions concerning the drug and even paid the New England Journal of Medicine to publish the study without raising concerns. The recommended approach would have involved all stakeholders and accept insight and critic from the medical practitioners rather than downplay the undesirable effects (Krumholz, Ross, Presler, and Egilman, 2007).
The management failed to apply clinical reasoning in making decisions concerning hiring the successor and on the issues related to Vioxx. The ethics in pharmacy require those in the field to make informed choices when the health of the public was an issue of concern. When the adverse effects of Vioxx came to light, the company should have broadened the research and come up with alternatives rather than related the consequences to other drugs in the market (Higgs, Jensen, Loftus, and Christensen, 2018).
Experience is paramount in decision-making (Dane and Sonenshein, 2014). The company should have considered Gilmartin’s skills in the field of pharmacology rather than on his business-oriented mentality. Additionally, a rational decision-making approach would have assisted the new CEO to address the concerns raised by Vioxx and made intelligent decisions. In the logical method, the CEO would have taken time to define the problems associated with the adverse effects of Vioxx, identify a criterion for approach, and selected the desirable alternative (Herrmann, 2017).