Now, what might you ask do these things have in common? Well, in what some reports claim to be a “surprise” announcement by Merck, the drug company announced today that Raymond V. Gilmartin was stepping down as chief executive of and that a longtime company insider, Richard T. Clark, would replace him.

Frankly I don’t see what the “surprise” is. Maybe the timing? Maybe he wanted a nice summer vacation. But, for Gilmartin to state to the board and shareholders in a December 2004 business briefing that “Merck’s response to the VIOXX withdrawal was swift and effective…and the long-term strategy we have in place is still very much the right one, given the environment in which Merck and the rest of the industry will be operating in the years ahead” is delusional.

This move was greeted with little enthusiasm by investors who had hoped for a high-profile outsider to help the embattled company rather than taking the easy way out and choosing just another old-school and ‘safe’ choice. Not too creative for a company that has not introduced a new successful drug for the last few years. In fact, Merck has been one of the slowest of the big drug companies to acquire new medicines from the outside — either through licensing deals or acquisitions. Instead, it has insisted on relying on its own internal research. Merck has failed in recent years to launch many big-selling products, with the exception of two new cholesterol drugs it is co-marketing with Schering-Plough Corp.

Now what was that about dinosaurs and extinction? I am certainly tired of seeing top executives continually being rewarded for poor performance. If the phrase “you eat what you kill” applied to Gilmartin, he’d be dead from starvation by now.

Do you think the timing of Merck’s announcement may have to do with the fact that Gilmartin may be called testify in some of the dozens of lawsuits filed in New Jersey over Merck’s withdrawal of its blockbuster arthritis drug Vioxx?

Thousands of people have sued Merck over Vioxx, saying they suffered heart attacks and strokes after taking the drug regularly for arthritis and other chronic conditions. Court cases over the drug were scheduled to begin as early as May 23 but have been postponed. Merck has said it plans to defend itself in every case and has set aside $675 million to cover its legal costs. Paying claims, if any, could cost the company up to several billion dollars more, analysts say.

In the meantime, Merck will have a three-person executive committee, led by Mr. Bossidy, to advise Mr. Clark, who was most recently president of the company’s manufacturing division.

Mr. Bossidy said that the departure of Mr. Gilmartin was unrelated to the problems with Vioxx or to his performance in general.
Asked directly asked whether Mr. Clark was the board’s first choice, Mr. Bossidy said only that Mr. Clark emerged as the best choice.

According to Trevor Polischuck, a fund manager at OrbiMed Advisors, an investment firm that specializes in managing health care funds, “Merck probably would have been better bringing in someone from the outside. Pharmaceutical companies are still R.&D- and marketing-driven companies. The fact of the matter is he’s not a drug guy, and Merck is a drug company.”

Was Gilmartin solely to blame for the Vioxx fiasco? The answer is likely “no”, but we will always need someone to blame.

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