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This paper examines communication strategies, organization, and tactics of the pharmaceutical firm Merck & Co., Inc., as corporate executives and staff faced the withdrawal from market of Vioxx, the company's most profitable product.

The paper explores decision methodology and criteria as Merck executives sought to communicate with their most important stakeholders during the most dangerous and critical period in the company's history.

As well prepared as Merck & Co. was for a product withdrawal, nothing could have prepared company officers for communicating on the scale, scope, and volume that this crisis would demand. The value of a well‐conceived crisis response plan is underscored, as well as a flexible, responsive organization. Among the more notable findings is that even large, well‐funded, experienced professionals may need to reconsider their organizational structure as they address a multi‐faceted, large‐scale problem. Issues include staffing, functional expertise, length of time on task, and strategic use of key resources.

A number of important lessons in communication strategy have emerged from the experience of withdrawing Vioxx from the market and defending the company against both litigation and continuing bad press. First, a crisis communication plan is essential. Their plan allowed Merck & Co. to identify key individuals to be involved, their roles and responsibilities. A second important lesson concerns persistence and a long‐term view, despite near‐term pressure for earnings performance. Overcoming plaintiffs‐bar litigation may take another five years. A third lesson involves identifying and measuring those issues which Merck stakeholders most needed to know in order to correct misconceptions. Finally, corporate officers recognized that they must have faith in their decisions and recognize the value of their employees (across the organization) in communicating the company's message.

This paper examines the pharmaceutical firm Merck & Co., Inc. and the withdrawal from market of Vioxx, the company's most profitable product.

Once a decision has turned out poorly—such as Merck's decision to launch and support the painkiller Vioxx—it is easy to criticize. However, are these bad outcomes the result of a good decision which turned out unlucky, or are they decisions where the bad outcome could have been predicted? This case follows Merck's pharmaceutical product Vioxx from initial development to launch and subsequent withdrawal, and considers the decisions made at each stage by the Merck executives involved. The case concludes by examining the financial impact of the Vioxx withdrawal on the company and on the Merck stock value.

This case allows the students to examine the various steps of Vioxx's development and launch. By doing so, they can consider whether the decision-making process broke down and why. By connecting the Vioxx launch and withdrawal to changes in Merck's cash flow and stock market value, the students can document the impact of such decisions on the value of the firm.

This case study aims to illustrate the interaction of organizational culture, human resource (HR) policy and firm performance. It contrasts the cultures of two science‐driven organizations – the Navy's nuclear submarine force and Merck, the large pharmaceutical firm – and traces the reaction of one individual to two organizations – the United States nuclear navy and Merck & Co., a large pharmaceutical firm.

This paper is a case study based on field interviews and secondary sources.

The task‐oriented culture of the submarine fleet is compared to Merck's relations and team‐oriented corporate environment. Management skills such as flexibility, power and influence, interpersonal communication, self‐awareness and goal setting can influence career outcomes. Managerial skills are important in all settings, but a given style's efficacy is contingent upon organizational context. Adaptability is important, as is personal mission. Thus, the case examines how organizational culture, HR policies and leadership interact with an individual's career outcomes and organizational performance as well.

Because this is a case study it is not generalizable. However, the issues depicted in the case have been recognized in the managerial skills literature. The case study serves to illustrate and deepen managerial skills concepts.

This case study has illustrative value as well as hypothesis and theory‐building value, but is not generalizable.

There is relatively little research on the specifics of how to apply managerial skills in a corporate setting. Hence, the case covers important, sensitive material of practical and theoretical value.

Allison Watkins, senior director of Merck's Vaccines Division, needed to decide on the pricing of Gardasil, Merck's newest vaccine and one of the company's most important product launches of the year. The outside consulting firm she had hired to recommend a price for Gardasil had suggested a price of $120 per dose (or $360 per person, as each person required three doses over six months to achieve adequate immunity). The Gardasil marketing team disagreed about this recommended price; some thought it was clearly too high, whereas others said it was too low. The latter group argued that Merck would be missing a major opportunity by setting the price at such a low level. Watkins now needed to decide whether to follow the consulting firm's recommendation or to set a different price.

The case highlights the complexity and issues around pricing in the pharmaceutical industry. To decide on the price of Merck's new vaccine, students will work through product economics and be introduced to the role of economic modeling in determining appropriate prices in the biomedical industry. The case is unique because it gives students an opportunity to calculate a cost per quality adjusted life year (cost per QALY), and in the process discover the power and limitations of such an analysis.

Reviews the latest management developments across the globe and pinpoints practical implications from cutting‐edge research and case studies.

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

Merck & Co. Inc. is a global research‐driven pharmaceutical company that develops, manufactures and markets a broad range of human health products. One such product is Vioxx, developed in a Merck research facility in 1994 and approved in 1999 by the United States Food and Drug Administration (FDA) for the treatment of pain, inflammation, and stiffness caused by arthritis. The drug was also later approved for use in the treatment of rheumatoid arthritis in both children and adults.

Provides strategic insights and practical thinking that have influenced some of the world's leading organizations.

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy‐to‐digest format.

To describe an executive development initiative contributing directly to the achievement of business goals, enhancement of leadership skills and succession planning strength.

Brings together revenue‐enhancing action learning projects, virtual learning, a global immersion component, and interactive sessions where participants, executive sponsors and leading experts engage in a dialogue on strategic priorities and leadership challenges.

Merck, the second‐largest healthcare company in the world, has been partnering with Wharton on a learning initiative to strengthen the strategic capabilities and leadership behaviors of its senior leaders since 2009. The company, which merged with Schering‐Plough in 2009, operates in more than 140 countries, with worldwide sales of around $48bn in 2011. The merger aimed to create a new kind of healthcare company – one that is improving health and well‐being by providing innovative medicines, vaccines and other consumer and animal health products. With greater global reach, the combined company could offer more diverse products through a broader range of businesses with a stronger development pipeline. These strategic shifts, along with a rapidly changing healthcare environment, demanded new skills from the company's leadership and increased the need for a strong talent pool with a similar background of strategic knowledge, language and experiences. The success of the learning initiative is credited in part to the development of strategic capabilities and leadership behaviors needed to drive business decisions in leadership roles. Further to its success, action learning projects resulted in strategic ROI and furthered Merck's growth strategy. Finally the learning initiative helped advance over 60 percent of participants into new leadership positions.

Demonstrates the value of a highly customized approach to building the leadership skills of senior executives and their ownership of strategy.

Notes the importance of appreciating multiple perspectives on industry development, explaining how locating one part of the program in Mumbai, India exposed participants to local business practices and increased their appreciation of the realities of doing business in an emerging market.

Explains how a worldwide healthcare company addressed strategic and leadership development issues through partnership with a leading provider of executive education.

This paper aims to offer a succinct description of the Vioxx recall in 2004 and discuss the fundamental reasons why Merck got into this trouble.

A review of literature has been conducted to provide key facts about the Vioxx disaster and to shed light on the operations of its maker Merck. The Vioxx recall case is analyzed from a perspective including both company profits and public interest.

Merck aggressively marketed an unsafe drug, under the brand name Vioxx, without properly disclosing its serious side effects to consumers. After the facts were revealed, the company faced costly lawsuits, angry investors and falling profits. This case clearly shows how a disaster can occur when a company becomes greedy and seeks undeserved profits at the expense of ethics and social responsibility.

Building a successful and competitive business requires managers to make decisions that balance profit and social responsibility. When business managers run their business solely for profit, problems will almost certainly occur. Such problems can cause severe damage not only to the company's customers but also to the company itself.

Vioxx is one of the biggest marketing mistakes in recent business history. This paper provides valuable learning insights and should be useful to corporate executives, government regulators and business scholars.

This paper aims to contrast the cultures of two organizations – the US Navy's nuclear‐submarine force and large pharmaceutical firm Merck – through the experiences of former naval officer turned pharmaceutical salesman, Howard Roark.

The paper starts and finishes with Howard Roark's appraisal. It considers the history of Merck, and Admiral Rickover and the nuclear navy, and explains Roark's employment history.

The paper shows how Roark's challenges in adjusting to Merck were interpersonal and political, and how leadership skills need to be adapted according to the environment.

The paper gives an insight into managerial skills, human resource strategy and organizational behavior.

The paper illustrates the importance of being able to adapt to different organizational cultures.

The purpose of this paper is to analyze the US Supreme Court's April 27 decision in Merck & Co. v. Reynolds as it affects the statute of limitations defense in securities fraud cases.

The paper explains the background of the Merck opinion, including the limitations period under 28 USC §1658(b)(1) for private securities fraud cases, a District Court dismissal of the original complaint, and a Third Circuit reversal; outlines three principles articulated by the US Supreme Court for applying §1658(b)(1) to securities fraud claims; and discusses what the Merck decision means for private securities fraud litigation.

The Merck decision is likely to affect private securities fraud litigation in several ways, most of which will benefit plaintiffs, who will argue that their claims are not time‐barred because the two‐year statute‐of‐limitations clock begins to run later.

The paper provides practical guidance by experienced securities lawyers.

This paper aims to study how multinational enterprises (MNEs) can best integrate legitimacy concerns into their new product-launching strategy to successfully introduce high-value hi-tech innovations in emerging countries.

Theoretical constructs on the role and process of legitimacy construction for the introduction of a new product are built upon the existing literature. Then they are validated and refined through the formulation and analysis of case studies of the launch of genetically modified cotton seeds by Monsanto in India and a HIV/AIDS drug cocktail by Merck in Brazil.

Legitimacy construction can serve MNEs to face challenges successfully while launching high-value hi-tech products in emerging countries. Challenges to MNEs are likely to be founded on a combination of four types of uncertainties: technological, commercial, organizational and societal. Expected challengers are public agencies and actors representing civil society. An MNE can prepare itself through legitimacy construction along three dimensions: redesign of technology, revision of marketing strategy and non-market investments. To implement the aforesaid, MNEs can engage in outreach in the form of strategic patience, market transaction, business collaboration, compromise and/or confrontation with diverse carefully chosen stakeholders.

The authors limited ourselves to tracing only the formal interactions of MNEs, while it is well-known that many informal and backdoor activities can also accompany their growth in emerging economies.

Legitimacy construction can help MNEs face challenges successfully while launching high-value hi-tech products in emerging countries. This calls for an evaluation of the systemic uncertainties followed by the formulation of a strategy for legitimacy construction and implementation through outreach to diverse systemic actors. Strategic patience can yield positive returns. Market transactions can serve as economic anchors. Collaboration can be pursued with parties who can share the costs of legitimization construction and/or reduce technological and marketing uncertainties. Confrontation should be the last choice. Compromise is the most probable but not the only outreach strategy possible after a confrontation.

Legitimacy implies product acceptance not only from the targeted consumer but also other societal stakeholders concerned with the safety and equity of the consumption in the emerging country, especially when regulations are not well-defined and/or implemented. The two kinds of societal stakeholders which are likely to monitor MNEs are public agencies and civil society groups. Public agencies will be concerned about the quantity, quality, technology or price of the innovation to be introduced. Civil society and NGOs may help the MNE act as citizen watchdogs for the environment and vulnerable communities.

Theoretical constructs have been developed in this paper on the sources of challenges in new product introduction, the types of challengers and the components of the firm’s legitimacy construction strategy and its implementation through an outreach strategy.