by Fran Hawthorne
Review by Jennifer Hansen, Ph.D. on Aug 8th 2004
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 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 email@example.com.