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Merck & Co.

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Merck & Co. traces its roots back to 1668, when the world's first pharmaceutical and chemical company opened. Some of its products, including NuvaRing, Januvia and Propecia, can have serious side effects.

Today, the company provides global health solutions with its pharmaceutical and animal health branches. It is the United States’ second-largest drug company, one that brought in $42.2 billion in 2014.

Merck & Co. stays competitive by making timely acquisitions, taking part in joint ventures with other major pharmaceutical players and continually researching to create the next blockbuster drug.Merck & Co. logo

Merck employs 69,000 people. Its pharmaceutical division creates products like Singulair (for asthma) and NuvaRing (for birth control). The animal health division has products such as vaccines for cattle and diabetes treatment for dogs and cats.

Some of Merck’s products, however, have left consumers with serious injuries. In that group, Merck is perhaps most well-known for its Vioxx scandal. The painkiller was introduced in 1999 and used by 25 million Americans before Merck was forced to recall it in 2004 because of the drug’s heart attack and stroke risks. Vioxx was blamed for more than 3,400 deaths, and Merck paid nearly $7 billion to settle tens of thousands of Vioxx lawsuits and to cover legal costs. It paid an additional $1 billion to settle criminal and civil charges over illegal marketing and sales charges.

These days, Merck faces lawsuits over several other products, including Fosamax, Januvia, NuvaRing and Propecia.

Fast facts about Merck
Established: 1891 Founders: Friedrich and George Merck
Headquarters: Whitehouse Station, N.J. Size: 69,000 employees
2014 Revenue: $42.2 billion

The History of Merck

Friedrich Jacob Merck opened Merck KGaA, the parent company of Merck, in Germany in 1668. He purchased an apothecary and sold morphine, cocaine and codeine. The company became a manufacturer in 1827, when Heinrich Emmanuel Merck transformed the business and named it E. Merck. A U.S. sales office opened in 1887. George Merck, Heinrich’s grandson, was appointed head of the U.S. branch, called Merck & Co., which opened in 1891.

Merck & Co. sold the first commercially-used smallpox vaccine in the U.S. in 1898. The next year, it published a guide for physicians and pharmacists known as The Merck Manual. The manual is translated in 17 languages today and is considered one of the most widely used texts in the world.

As the U.S. branch of Merck grew, the company established a manufacturing facility in Rahway, N.J., in 1902. E. Merck and Merck & Co. severed their relationship in 1917, a result of World War I.

In 1944, Merck’s researchers completed two major accomplishments, discovering streptomycin (an antibiotic to treat tuberculosis) while working with researchers at Rutgers University, and creating a cortisone synthesis to treat pain.

Merck agreed to a company changing merger with Philadelphia pharmacy Sharp & Dohme in 1953. The move enabled Merck to remain competitive and granted it access to Sharp & Dohme’s established clients. Together, the companies became the largest U.S. manufacturer of prescription drugs at the time.

Vaccines were Merck’s next endeavor. In 1963, Merck manufactured the first measles vaccine, followed by the first mumps vaccine in 1967.

Other companies completed mergers that would later affect Merck. In 1971, the Schering Corporation merged with Plough; these later merged with Organon BioSciences; and all of them merged with Merck in 2009.

In 1979, Merck sold a highly-successful high blood pressure drug called Enalapril with sales that reached $550 million. In 1988, Vasotec (used to treat congestive heart failure) became Merck’s first drug to bring in a billion dollars in one year.

Throughout the 1980s and 90s, Merck worked with major pharmaceutical companies, such as Astra AB, Zeneca and Johnson & Johnson. In 2000, Schering-Plough worked with Merck to create drugs for cholesterol and respiratory needs. Nine years later, the two companies merged when Merck bought Schering-Plough for $41.1 billion. The deal gave Merck access to name brands like Dr. Scholl’s and Coppertone and to Organon’s product line, which included NuvaRing.

In May 2014, Bayer bought Merck’s consumer care business for $14.2 billion, taking brands like Claritin and Coppertone.

Vioxx Scandal

Nearly a decade after the recall of Vioxx, a non-steroidal anti-inflammatory drug (NSAID), there’s still disagreement about how the dangerous drug received approval from the U.S. Food and Drug Administration (FDA) and why it was kept on the market for five years.

What is clear is that Merck was forced to pay. After denying reports of dangerous cardiac side effects for years, the manufacturer finally recalled Vioxx in 2004. Tens of thousands of lawsuits followed, creating what is believed to be the largest multidistrict litigation in history. Merck settled with all the claimants – paying out nearly $7 billion along the way – but admitted no fault.

Injured consumers weren’t the only ones who went after Merck. Company shareholders and the U.S. Senate also had problems with Merck’s actions. The shareholders accused Merck of deceitfully marketing the painkiller, and the dispute ended with Merck spending millions in legal fees and agreeing to an appointed marketing monitor.

The U.S. Senate Finance Committee examined Merck’s relationship with the FDA, wary that Vioxx’s side effects were minimized and that Merck was responsible for questionable marketing tactics and fraud. Merck pleaded guilty to accusations regarding illegal marketing practices and paid $950 million, which included a $321 million criminal fine.

When news broke in 2009 that Merck had created a “medical journal” promoting Vioxx without disclosing financial interest, the controversy was reignited. The publications were published from 2002 to 2005 in Australia through Elsevier, an academic publisher. The journal had articles endorsing Vioxx and Fosamax.

Merck’s troubles with Vioxx weren’t limited to side effects and journal articles. The company was also involved in a Medicaid scandal involving Vioxx that ended in a $650 million settlement. In 2008, the Justice Department examined a whistleblower suit and another lawsuit that accused Merck of providing hospitals with major discounts on drugs, including Vioxx, in the hopes that Medicaid patients would be given the medications and continue them after they left the hospital.

Although Merck did not admit wrongdoing, it did agree to pay the $650 million settlement, including a payment of more than $360 million to the federal government. The agreement also stipulated that Merck sign a five-year Corporate Integrity Agreement.

Other Dangerous Products

Merck’s latest travails involve lawsuits over a number of its other products, including Fosamax, Januvia, NuvaRing and Propecia. All of the drugs made money for Merck but have come at a high price for consumer health.

Fosamax

Fosamax is used to prevent bone loss but is linked to osteonecrosis of the jaw, also known as Dead Jaw Syndrome. The condition can occur following dental work and causes the jaw to become infected and even collapse. The drug can also cause bones to weaken and crumble, leaving patients vulnerable to fractures.

The FDA updated warnings on the drug’s label to communicate the dangers and limitations of Fosamax. More than 1,000 patients filed lawsuits against Merck after developing side effects. A jury awarded a woman who developed ONJ after taking Fosamax $8 million in 2010, but a judge reduced the award to $1.5 million.

Januvia

Approved by the FDA in 2006, Januvia (sitagliptin) treats type 2 diabetes but is linked to serious side effects like pancreatitis and pancreatic cancer. There were 200 reports of acute and chronic pancreatitis related to Januvia in 2011. Pancreatitis is an inflammation of the pancreas, which may be accompanied with severe pain and bleeding. The disease is fatal in 10 to 30 percent of cases.

Pancreatic cancer ranks No. 4 in the world among cancer deaths, and beyond that carries a low survival rate for patients.  It is dangerous because it can develop unnoticed and be discovered only once cancer is at a stage that will no longer respond to treatment.

The FDA issued an additional warning for dipeptidyl peptidase-4 (DPP-4) inhibitors like Januvia in 2015, stating the drugs could cause severe joint pain. The agency said it received 33 reports of severe, disabling pain from 2006-13.

Patients and family members of patients who took Januvia and then experienced problems filed lawsuits against Merck. According to claims, some former Januvia users died after using the drug.

NuvaRing

Organon, a subsidiary of Merck, manufactures NuvaRing, a birth control ring associated with life-threatening blood clots. Available since 2001, the device is inserted into the vagina once a month to prevent pregnancy.

Unfortunately, NuvaRing is associated with blood clots and heart problems. Because of these possible side effects, the FDA released drug safety communication in October 2011. The number of NuvaRing patients filing federal lawsuits against Merck grew to more than 1,000 before the company settled almost all of them for $100 million in 2014.

Propecia

In its first year on the market, more than 400,000 U.S. men used Propecia (finasteride), a drug that treats male pattern baldness. Users of the drug may suffer from sexual side effects, including decreased libido, erectile dysfunction and ejaculation disorder. The FDA received hundreds of reports of sexual dysfunction related to Propecia. Clinical trials confirmed that for some, the sexual side effects continued even after patients stopped taking it.

Propecia is also linked to an increased risk of high-grade prostate cancer. The FDA made changes to the drug’s safety label in 2011 to reflect the possibility of cancer, sexual risks and possibility of continued side effects post-use. Hundreds of men who experienced Propecia side effects filed lawsuits against Merck. More than 700 cases are pending in an MDL, and the first trials are set for October 2016.

The Future of Merck

It’s difficult to predict how much the growing number of personal injury lawsuits will cost Merck. The patent for one of Merck’s best-selling drugs, Singulair, for asthma, expired in 2012. However, sales of Januvia rose, helping to offset the losses.