Financial Times FT.com

Merck chief ordered before Senate hearing

By Christopher Bowe in New York

Published: November 13 2004 01:00 | Last updated: November 13 2004 01:00

Raymond Gilmartin, chief executive of Merck, will testify before a Senate committee next week on the withdrawal of Vioxx, in spite of efforts by the drug company to send others in his place.

Thursday's hearing has been arranged by the Senate finance committee to investigate Merck's response to safety concerns about the painkiller before its withdrawal from the market. Also under scrutiny will be the role of the Food and Drug Administration, the industry regulator.

Vioxx, an anti-inflammatory drug used for arthritis, has been found to double the risk of heart attacks and strokes after 18 months' use.

Merck had sought to shield Mr Gilmartin from what is expected to be a tough question-and-answer session. The executive, who is due to retire, is most comfortable working from detailed, prepared texts.

According to a person close to the committee, the company negotiated to send someone else in his place, but was refused. "Initially, they thought there were other people more appropriate," the person said. "We wanted who we invited."

Merck confirmed that Mr Gilmartin would testify next Thursday but declined to comment further.

The search for Mr Gilmartin's successor has taken on a new urgency in light of the Vioxx withdrawal.

Merck has lost its blue-chip status AAA bond rating, its shares have plunged 41 per cent, and it faces difficult questions about its management and future strategy.

A successor to Mr Gilmartin, who is set to hand over the baton by the end of next year, is likely to be an executive with a strong public persona to ease investor worries, one analyst said.

Merck launched an advertising campaign on Friday featuring an "open letter" from Mr Gilmartin saying the facts around Vioxx would eventually prove the company's "rigorous adherence to scientific investigation, transparency, and integrity".

Conflicting clinical study data and scientific studies surrounded Vioxxfor years until Merck withdrew the drug in September.

"It looks like the [Food and Drug Administration] and Merck saw a lot of red flags from the beginning," said Charles Grassley, the Iowa republican committee chairman.

Rami Armon, analyst at Lehman Brothers, said: "We certainly expect increased headlines coming from the hearing, particularly as Grassley points out this will be the first time that the FDA and Merck will testify together on Vioxx."

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