The Merck Druggernaut

Fran Hawthorne entitles her "inside story" of Merck by punning the word "juggernaut": The Merck Druggernaut.  Presumably we can glean from this title that we are about to read about a powerful, inexorable force of a company among other pharmaceutical giants.  Moreover, Hawthorne's title captures the sometimes blind loyalty that employees, consumers, and the industry have for Merck.  Blind loyalty, is always risky, for one's idols may fall from their proud perches and it is exactly this story that Hawthorne investigates.  The focus of The Merck Druggernaut is to chronicle the "struggles of a once-shining star."  To achieve this goal, Hawthorne also tells a captivating tale of the political machinations of the pharmaceutical industry—Big Pharma—in order to measure Merck against its often, scandalous behavior. 

Hawthorne places Merck's motto at the center of this narrative, seemingly to invite the reader to consider how good Merck makes on this promise.  In 1950, George Wilhelm Merck, the man responsible for revolutionizing the pharmaceutical industry in America by creating in-house research facilities, declared to his audience at the Medical College of Virginia, "We try never to forget that medicine is for the people.  It is not for the profits.  The profits follow, and if we have remembered that, they have never failed to appear . . ."(17-1, 26).  What is interesting about this motto is how deceptively ambiguous it is.  On first read, it appears that what Merck foremost intends to be is an ethical company, pioneering to conquer devastating ailments to which humans befall. On a closer reading, however, one can argue that what guides this "druggernaut" is in fact self-interest, and uses its reputation as an ethical company toward this goal.  Hawthorne carefully considers if, in fact, Merck is a different kind a company: one that values research and invention more than profit-making; is Merck a somewhat altruistic company or a very successful self-interested company, using its reputation for research and philanthropy to earn industry respect and thereby a huge profit share?

What ultimately emerges in this book is a portrait of Merck as a company that is only slightly better than its competitors. Indeed, under the tutelage of both George Wilhelm Merck and then later Roy Vagelos, Merck did become the "king of research," by attracting top scientists and giving them a great deal of freedom for pet projects in state of the art facilities. What is troublesome is the ends to which the work of these brilliant minds were put. 

While we might like to think that Merck's motto means that they are searching out "magic bullets" for devastating illness such as "river blindness," malaria, AIDS and, of course, cancer, the majority of projects that Merck devotes itself to are for baby boomer drugs that treat "lifestyle ailments": obesity, heartburn, anxiety, high blood pressure, etc (see Chapter Four: "The Drugs of Tomorrow).  As anyone in business knows, you cannot make profits on a drug without high demand (and persons willing to pay), hence there are no profits to be captured in researching tropical diseases that affect only poor and developing nations.  Moreover, complicated illnesses such as cancer or AIDS require years of research and development, which Hawthorne demonstrates is very expensive, and ultimately this research may not pay off in the end (see Chapter Three: "Off the Cutting Edge.").  What had earned Merck a reputation for high ethical standards was a decision that Roy Vagelos made in the 1970s to donate "Mectizan" to poor countries, mainly in Africa, to treat "river blindness" which is transmitted by black flies.  Merck discovered the compound by accident while researching parasites in farm animals.  Hawthorne reports: "Merck's serendipitous find could have a potential market of over a hundred million people. And virtually none of them could afford to pay for it." (15).  Perhaps, this staggering act of philanthropy from a major corporation should set Merck apart from other industry giants. Lesser companies may have chosen to not to develop the compound, or to overcharge those who are barely able to pay for it in the first place.  The fact Merck donated Mectizan suggests an ethical backbone to Merck seldom found within the industry at large. Perhaps Merck does treat people, rather than seek profits.  However, the rest of the book suggests that Merck is not quite as noble as this act seems.

In chapters 5-8, Hawthorne describes the inner workings of Big Pharma: DTC advertising, freebies to doctors, political maneuvers to extend patents, block generics (even to third world countries unable to afford expensive AIDS medication), and push through a version of the Medicare bill likely to reap the most profits for the pharmaceutical industry.  On balance, Merck is a bit better than other companies.  For example, while they spend as much as companies such as Pfizer on DTC ads, Merck would never engage in the kind of campaigns that Pfizer did for Viagra (e.g. "an official sponsor of Valentine's Day") (157).  Merck spent more money than other companies on DTC advertising, but its conflicted image of itself as research oriented, led to bad marketing campaigns.  Merck certainly has given "freebies" to doctors (vacations, dinners, tickets to games and the theater, etc.), however Merck reps are better educated about their products than other drug companies representatives, and Merck changed its company policies to comply with AMA ethics guidelines cracking down on freebies to physicians. Reading through these chapters, Hawthorne gives the reader the impression that Merck ultimately does what is right to protect is public reputation as a respectable and ethical company. However, the reason Merck protects such a reputation in Big Pharma country is ultimately to keep earning profits.

Hawthorne eventually reveals the tragic flaws in Merck that tarnished the once shining star: an accounting scandal and an unwillingness to have done what was "right" towards developing countries with huge a huge AIDS epidemic.  The accounting scandal followed from Merck's anticipation that health care was to be closely monitored by HMOs.  Merck bought a pharmacy benefits manager (PBM), Medco, to—on a cynical read—ensure that Merck drugs made it onto prescription benefit formularies.  Around the time of other great accounting scandals breaking the news, e.g. WorldCom and Enron, word got out that Merck was engaged in creative "accounting" practices of its own in relation to Medco.  This scandal led to declining stock and lowered consumer confidence.

However, the more disappointing story turns on Merck's own failure to live up to its motto and put people before profits.  Rather than offering to lower drug prices and ease accessibility of its AIDS drugs to Africa and other developing countries, Merck offered 3 million dollars to Harvard University in order to research how to set up a stable infrastructure for health care delivery.  Moreover, Merck joined suit with several other pharmaceutical giants to prevent Brazil and India from making cheaper generic versions of their drugs.  Both of these choices clearly revealed Merck's true motivation: profit.  

Hawthorne is truly a fair and balanced writer. She considers, for example, the common arguments puts forward for why they block generics, charge high prices, and fight to maintain patents.  Essentially the drug business is a risky and expensive one, which needs to protect its capital in order to invest in more research and development.  Hawthorne also explains how the DTC advertisement campaigns fit into an older health care trend toward consumer empowerment.  Giving health care consumers information about the latest products and encouraging them to seek medical attention often results in more compliant patients. 

Hawthorne is a masterful story teller and quite adept at explaining to her reader the reasons for drug company secrecy, the expense and risk of drug development, the ingredients of a good drug company and the complex politics of Big Pharma.  While some may be drawn to this book to learn more about the particular strengths and weaknesses of Merck, others will gain a comprehensive and balanced understanding of how the pharmaceutical industry works and why it is often the target of much scrutiny and consumer fury. 

© 2004 Jennifer Hansen

Jennifer Hansen is an Assistant Professor of Philosophy at Gettysburg College.  She has recently published, along with Ann Cahill, The Continental Feminism Reader (Rowman and Littlefield).  She also is the managing editor of Studies in Practical Philosophy.  She can be contacted at jhansen@gettysburg.edu.