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Punishment and Settlement

Case Study: Punishment and Settlement

  1. Did Merck Try to Avoid the Truth?
    Emerging facts from the media are indicative that Merck could have avoided the truth
    about their controversial drug Vioxx. According to reports from various quotas, Merck was well
    aware of the effects of the drug right from the time it was first released into the market. His
    argument is that the company, fully aware of the effects of the drug came upon with a marketing

Case Study: Punishment and Settlement 2

strategy. The strategy was in form of package that was used by the sales team for training. With
this package, the sales team could easily avoid questions from doctors that could easily
incriminate the drug. Although Merck has denied these allegations, it becomes apparent that
Merck was fully aware and attempted to avoid the truth

  1. An Opinion on the Outcome
    The very first time the issue was taken for trial the out coming was surprising. The ruling
    was in the ratio of 5: 4 with the majority ruling in favor of the defendant. Merck was initially
    exonerated from blame as they proved that they were not are of the effects. Merck argued that
    the earlier tests that were carried out on the drug indicated that the drug was safe for use
    (Marckaham, 2015). They further argued that upon realizing that the drug had side effects, they
    immediately withdrew it from the market. However, this ruling did not last as it was overturned
    and Merck was found culpable. The culpability of the company mainly lied with the fact that
    they appeared to have hid the truth from medical practitioners though the tactful training
    package. This second outcome of the case was more justified and made more sense based on the
    facts provided.
  2. Explain whether you feel the consumer has any responsibility
    In marketing, there is a principle referred to as ‘caveat emptor’ which is translated to
    mean that the buyer ought to be ware. Ideally, this principle means that a buyer could not make
    choices uninformed and should take reasonable steps to verify quality of product (Berenson,
    2005). This is often the case when it comes to consumer products and mainly foods. It is for

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instance expected that a buyer of bread is aware of ingredients and hence if they are allergic to
yeast they will keep away. One cannot buy bread and then seek to sue the company for use of
years because the buyer should be aware. However, in a case involving medicine, the buyer is
not expected to be aware as not all buyers are expatriates in the field. As such, the consumer was
not in any way responsibility and could not take part of the blame

  1. Explain the Role of FDA
    Food and Drug Administration (FDA) is an agency established by law whose primary
    role is to regulate both good and health industry. The role of the agency is o ensure that all the
    foodstuffs and drugs released to the market are fit for consumption by human beings. All foods
    and drugs must be tested and when they pass the test of quality, then they are branded to show
    that they are fit for consumption (Marckaham, 2015). In this particular case, it was surprising to
    note that the drug had been in the market for years. FDA admitted to not having done enough to
    look out for the interests of Americans. With proper measures in place, the effects that were
    caused by the drug could have been avoided. Going by the statistics that were released by FDA
    28,000 deaths were
    too many to go unnoticed. This means that there was a lapse in the accuracy of FDA.
  2. Assess Punishment
    The punishment awarded by the court was satisfactory but perhaps not enough. However,
    it certainly served the purpose for which it was intended. Merck, though an overwhelming

Case Study: Punishment and Settlement 4

verdict was required to pay to the plaintiff an amount as compensation (Berenson, 2005). In
addition, the drug which was believed to bring a considerable amount in profits was withdrawal
from the market. This must have been one painful experience but necessary to ensure that a
lesson was learnt. A total amount of $ 11 billion was a huge dent that certainly threatened the
ability of the company to remain afloat. The most appropriate punishment is one that ensures
deterrence in future.

  1. Deterrence of Future Behavior
    One way to deter behavior of this nature by a corporation is to ensure that the FDA
    tightens any loopholes that would let products in the market unchecked. It is imperative that any
    food or drugs for human consumption be taken through serious scrutiny and ensures that they are
    fit. The Food and Drug Agency must move swiftly to ensure that such incidents are kept at bay.
    More than a year of circulation without the agency knowing the adverse effects of the drug is a
    sign of negligence. In addition, there ought to be legislations that introduce a process that will
    allow rigorous checking process of the foods and drugs before their release into the market.


Berenson, A. (2005). For Merck, Vioxx paper trail won’t go away. The New York Times,
August 21 st , 2005.
Marckaham, J. (2015). A financial history of modern U.S. corporate scandals: From Enron to
reform. New York: Routledge

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