Merck CEO Raymond Gilmartin: Bankruptcy Is Not an Option

Over the weekend, people who suffered heart attacks or strokes after taking Vioxx figured prominently in accounts of Merck's problems in the New York Times and on 60 Minutes.  Merck CEO Raymond Gilmartin did not provide new quotes for either piece, but he did talk to the Ann Arbor News last week.  According to that article--

Gilmartin said the company will not take "draconian" measures, such as across-the-board layoffs or salary freezes. And when asked if the company will entertain the idea of filing for bankruptcy protection to handle the litigation, Gilmartin responded simply: "No way."

The big "no" to bankruptcy is good news for the victims of the Vioxx fiasco.  Last week, Gilmartin also spoke to Robert Bazell of NBC News in an on-camera interview.  The transcript and video can be found here.  In the interview, Gilmartin said Merck "acted responsibly at every step of the way" and had no "good evidence" of cardiac risk until September 30. 

In other words, Gilmartin merely repeated the company line that it did nothing wrong but didn't explain the damaging internal documents that have surfaced.  Unfortunately for Merck, Gilmartin's rosy picture is disputed (in my view) by the evidence set forth in all the other sources linked in this post.

Merck's most noticeable offensive measure over the weekend was to take out a full-page ad in Sunday's New York Times (and, presumably, other newspapers), claiming that Merck "put the interests of patients first."  Titled "An Open Letter from Merck," the advertisement carried a Gilmartin by-line.  Toward the end, Gilmartin wrote, "We will continue to address the facts through letters like this one in the days ahead."

It might be better if Gilmartin and other Merck officials "addressed the facts" in forums that carried more weight in the court of public opinion.  Meanwhile, as it advertises to defend Vioxx, just as it used to advertise to sell it, Merck is facing investigations by the Justice Department, Congress, and the SEC. 

UPDATE 2/14/04. For all of my collected Vioxx posts, look here. If you are (a) someone who was harmed by Vioxx or (b) a lawyer who wants to refer your Vioxx cases to a highly-competent team of mass-tort lawyers, look here.

Comments

[Ted]

At one of my previous law firms, we once performed an investigation on behalf of a client in anticipation of accusations to come from a "60 Minutes" news story, found that there was no basis to the accusations, and sent CBS a lengthy point-by-point rebuttal to what was going to be in the news story. CBS got around libel problems by phrasing the accusation as the tautology "If BigCorp. did X and Y, then that would violate Law Z" and quoting one sentence from our letter. (No action was ever taken against the client.) So it's a bit presumptuous to say that Merck didn't respond. 60 Minutes just chose to emphasize the evidence that made for better television, demonstrating once again why Mencimer's accusation that TV news programs carry water for tort reform is laughable.

I only know what 60 Minutes chose to show in its presentation of a plaintiff's opening statement, but it sure looked like a lot of second-guessing to me, especially in the context of the Merck responses in the New York Times and 60 Minutes' failure to mention the studies that didn't show cardiological problems.

Other Merck statements here and here.

(P.S. Evan, was that your back of a head in the 60 Minutes shot of the Mealeys' conference?)

[Nic]

Gilmartin was on "American Morning" on CNN, today, where he withstood intense cross-examination by Heidi Collins. (I'm not sure, but he might have provided a list of questions he was prepared to answer.) It definitely wasn't Lou Dobbs, or Wolf Blitzer, or even Larry King Live. Gilmartin's PR handlers must have preferred the nice living room set and the friendly American morning "chit chat" format to walk him through his talking points.

[Ted]

I don't see any indication that Gilmartin's interview was a sham. The questioning didn't have much in the way of follow-up or detail, but that's par for the course on TV news.