Gardasil 2008-09Arthur W. Page Society

Agenda

Why pick Gardasil?

Background

Marketing & Communication

Advertising campaign

Present Issue Status

Financial Impact

Page Principles

Why pick Gardasil?

Great example of how important identifying potential and emerging issues are in the strategic planning process

Great example of importance of environmental scanning

Wonderful opportunity to apply Page Principles to a “real world” crisis

Great example of the importance of the transparent and authentic communication

Background

Merck & Co. launched Gardasil in June 2006

Clinically tested on 11,813 people

27 deaths have been reported

In 2007 more than 8 million girls ages 9-17 were vaccinated

More than 10,300 adverse effects have been reported since Gardasil was approved.

Background (cont)

In 2007 Merck & Co. grossed just over $18 million in profits

Texas Governor Rick Perry passed legislation in 2008 requiring girls entering 6th grade to receive the Gardasil vaccine.

In 2008 Gardasil was added to the list of vaccines immigrants must receive

In 2004 Merck & Co. announced its withdrawal of VIOXX.

Marketing & Communication

Nov. 1, 2006: Merck & Co.’s Cervical Cancer Vaccine Gardasil added to Centers for Disease Control Vaccines for children.

Nov. 13, 2006: Merck & Co. launches national advertising campaign for Gardasil.

Spring 2008: Merck & Co. partners with Barnes & Noble to advertise Gardasil.

June 25, 2008: Merck & Co., Inc. receives complete response letter from the Food and Drug Administration [FDA] for the use of Gardasil in women 27-45.

July 8, 2008: Merck & Co. responds to questions about adverse events reported following Gardasil vaccination.

Sept. 12, 2008: FDA Approves Merck & Co.’s Gardasil to protect against two additional cancers. Nov. 13, 2008: Gardasil demonstrated efficacy in preventing HPV-related disease in Males Phase III study.

Advertising Campaign

Click on the ads to view Gardasil commercials

Marketing & Communication (cont)

Gardasil’s initial effort was the “One Less” campaign

Targeted women ages 9-26

The campaigns showcased women outside of the “little girl” stereotype

On July , 2008 Merck & Co. issued a press release in response to Gardasil’s adverse effects

Merck denied all responsibility

After the press release the second round of commercials aired

Present Issue Status

More than 10,300 adverse reports have been filed against the vaccine

The FDC and CDC are closely monitoring the effects of the vaccine

If the recipients experience adverse effects they can report to the FDA MedWatch

Approximately one month after the FDA approved the Gardasil vaccine, the first adverse effect was reported.

Reaction reports have come from 21 states

Present Issue Status (cont)

Reactions were reported from ages 11-27

94 percent were considered non-serious

According to the CDC, experts have found no medical pattern to the reports of serious effects

After the reports Merck changed the label on Gardasil to include more side effects

The CDC and FDA have declared Gardasil safe for use

Opponents

National Vaccine Information Center [NVIC]

Virginia House of Delegates'’ John Welch III

Senator Delores Kelley of Baltimore

Henry J. Kaiser Family Foundation

www.Gardasil-Talk.com

Blogs

Supporters

Center for Disease Control [CDC]

The Food and Drug Administration [FDA]

Texas Governor Rick Perry

World Health Organization

American Social Health Association

Planned Parenthood

Financial Impact

Gardasil costs $ 360 for three doses

In 2008 Merck & Co. ranked 4th in the pharmaceutical industry

VIOXX caused Merck & Co. to slip in the ratings

Vaccines served as a critical function in creating the Merck & Co. turnaround

Gardasil’s growth slowed during 2008 due to growing concerns of the product’s side effects

Financial Impact (cont)

Page Principle: Tell the Truth

Merck & Co. denied any ownership to the claims made against Gardasil

By waiting so long to speak out Merck & Co. did not get the opportunity to state that it was doing follow up testing

Merck & Co. evaded its social responsibility to the truth

By creating clear communication with the public Merck & Co. will be able to minimize the negative effects

Page Principle: Prove it with action

Merck & Co. held a press release on July 8, 2008 to comment on the reports regarding Gardasil

Merck & Co. should not accept fault for the negative effects until it is certain of the cause

Merck & Co. should also continue testing until it has found the cause of the negative effects

By creating clear communication with the public Merck & Co. will be able to minimize the negative effects

Page Principle: Listen to the customer

Merck & Co. neglected public concern through lack of communication

Merck & Co. needed to acknowledge that it was looking into the problem at hand

By periodically releasing information to the public Merck & Co. will build a relationship with its customers

Page Principle: Manage for tomorrow

Merck & Co. needs to have a clear communication plan for the future

The company needs to be aware of grass roots efforts such as blogs

More than 750 blogs mentioned Gardasil as of Dec. 17, 2008

Page Principle: Conduct public relations as if the whole company depends on it Merck & Co. has not

operated as if the company depends on it

Continuing to push legislation for making Gardasil required could be put on hold until it address the concerns of its consumers

The company should have learned from its mistakes with VIOXX

Merck & Co. should have waited to announce Gardasil for men until after the tests come back

Page Principle: Realize a company’s true character is expressed by its people

Merck & Co.'s Web site states it prides itself on the quality of its workers, ethical standards and values, the company’s mission, compensation and benefits as well as the work environment. of its consumers

The company needs to maintain a strong relationship with public health companies

In addition, Merck & Co. needs to maintain a positive relationship with its customers

Page Principle: Remain calm, patient and good-humored

Merck & Co. immediately denied that the problems with Gardsil were its fault

This made the company come off as defensive which goes against this Page Principle

Merck & Co. should commit to further research