WSJ.com - Experts Praise How Merck Broke the News

[Guest guest]

From the company that makes MMR.................could the story be the

same. yes it is

But you will never see this from them about MMR

Sheri

>Date: Sat, 02 Oct 2004 07:00:55 -0700

>From: Belkin

http://online.wsj.com/article/0,,SB109658530291733108,00.html?mod=todays_us_

page_one

COMPANIES

Dow , Reuters

Merck & Co. Inc. (MRK)

PRICE

CHANGE

U.S. dollars 33.31

0.31

5:01 p.m.

Experts Praise How Merck Broke the News

By JOANN S. LUBLIN

Staff Reporter of THE WALL STREET JOURNAL

October 1, 2004; Page B1

Vioxx's maker, Merck & Co., followed the crisis-management playbook

yesterday. But more work lies ahead.

The company's global withdrawal of the blockbuster drug Vioxx -- along with

extensive media appearances by Chief Executive V. Gilmartin and key

members of the company's board -- exceeded the norm, management experts said.

Mr. Gilmartin turned up on CNBC twice within an hour, appearing soon after

the cable business-news network interviewed Lawrence Bossidy, a powerful

outside member of Merck's board.

[nowides]EXPIRATION DATE

" Page One: Merck Pulls Vioxx From Market After Link to Heart Problems

The pharmaceuticals giant responded " almost in a paragon way, " said Gerald

C. Meyers, a University of Michigan business professor of organization and

management. " They're being very open about what they know. They're bringing

in top people to lend veracity, " he said. Faced with a major crisis, " most

companies fail because they're not prepared. "

But the Merck crisis could linger for a long time, as its management

struggles to quell anxiety among patients, employees and investors. The

manufacturer withdrew its popular painkiller after a trial showed increased

risk for heart attacks or strokes. The move sent its stock falling nearly 27%.

Merck also may face more criticism for having strenuously denied for

several years suggestions by outside researchers that use of Vioxx led to

heart problems. The company even published its own studies suggesting the

drug wasn't causing harm.

To maintain faith in its crisis management, specialists say, Merck will

need to make prompt disclosures of any additional information about Vioxx,

good or bad, through national advertising campaigns, direct patient contact

and meetings with their physicians. Merck officials should assure the

public that " we will make sure you know day by day what we know " about the

drug's problems, said Harry M. Jansen Kraemer Jr., former chairman and CEO

of Baxter International Inc. " This is a matter of life and death. "

Mr. Kraemer, who retired last spring from the helm of the big

medical-products maker, knows what he's talking about. One weekend in late

summer 2001, a senior executive called to tell him about several patient

deaths in Spain possibly linked to certain Baxter kidney-dialysis filters

known as " dialyzers. "

" We have to do the right thing, " Mr. Kraemer recalls telling his colleague.

He then added, " Let's get the facts. Let's communicate it. And every day

that we have additional information, let's get it out. "

Mr. Kraemer activated his crisis-management team. Within days, Baxter did a

world-wide recall of the filters involved, which had been produced at a

Swedish plant. The internal team met every day for at least an hour for

several months. The company relayed updates to renal patients and their

physicians via an existing hotline.

Merck also sought to manage its worst crisis ever by summoning an existing

crisis-communications team. " We put our plan into action, " said Joan

Wainwright, vice president for public affairs. The drug maker shared drafts

of Vioxx-withdrawal materials with a public-relations firm that specializes

in crisis management. The firm, which she declined to identify, offered

minor changes.

Effective internal communication is as important as informing outside

constituents about a significant corporate crisis. During Baxter's

dialysis-filter crisis, Mr. Kraemer used voicemail to provide employees

with regular updates " so everybody knew what was happening, " he said.

Yet some Merck public-relations staffers didn't learn about the drug's

impending withdrawal until Wednesday afternoon. " We wanted to keep this

information to a fairly tight circle, " Ms. Wainwright explained.

In a crisis, everyone from rank-and-file workers to top officials wants to

know, " What does this mean to me? " Easing such worries " is going to take

tremendous hand-holding " by Mr. Gilmartin, said S. " Steve "

Jr., interim chief executive at auto-parts producer Federal-Mogul Corp. and

a turnaround veteran. " He will be spending a lot of time at their facilities. "

Merck will enhance its credibility if Mr. Gilmartin comes across as " a

well-informed, articulate cool cat who's not only able to think straight

but able to articulate what's going on, " Prof. Meyers said.

While many observers praised the Merck leader for agreeing to appear

promptly on television, Mr. Meyers said he thought Mr. Gilmartin " looked

frightened. " Mr. Meyers added: " His body language said, 'What a hell of a

mess do I have here?' "

Newly media-friendly Merck board members said they don't plan to

micromanage Mr. Gilmartin during the Vioxx crisis. " We shouldn't be sitting

around a board table telling management what to do, " said G. Bowen,

a Merck director since 1986 and president of the W. Mellon

Foundation in New York.

Nevertheless, Merck board members should hire independent scientific

advisers to explore whether the drug ever should have been marketed,

proposed Troubh, chairman of Enron Corp., the former energy giant.

" You need to review the research process to make sure this doesn't happen

again. "

Corporate crises often spawn changes in top management. The Vioxx

withdrawal is reviving speculation that Mr. Gilmartin won't serve until he

reaches Merck's mandatory retirement age of 65 in March 2006. He has yet to

designate a successor, though several insiders are vying for the No. 1 spot.

His defenders have long noted that the company's many problems aren't his

fault. Yesterday's massive product withdrawal " has absolutely no

implication for Mr. Gilmartin's tenure as CEO, " said Mr. Bowen, a member of

the board's compensation committee, which oversees management succession.

" We are committed to announcing a successor by late 2005. None of that has

changed one iota. "

Until now, however, Merck hasn't given any indication of actively pursuing

outside CEO prospects. " We have been intending from the beginning to look

outside as well as inside. We are getting into that, " Mr. Bowen disclosed

yesterday.

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Vaccination Information & Choice Network, Nevada City CA & Wales UK

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