The culture of bullying and intimidation has resulted in total abuse of our values and given us such a low self esteem. We cannot trust or speak up. Just walk around and you will see how sick everyone is. We are like deer in front of head lights waiting for Craig to pull his next crazy trick.
Just think we are being managed by Schering Plough goons is really an absurd. demented and baffling.
Craig was a direct report to Carrie Cox.
Next -- the good news: This resolves the single biggest litigation exposure New Merck faces, as a result of the bust-up of Schering-Plough, in late 2009. Perhaps immodestly, I must note that I predicted (repeatedly) that it would settle for over $500 million (as there was a veritable orgy of evidence of scienter -- allegedly, of course). It has.
Now, the sobering object lesson: Ex-CEO Hassan, Ex- No. 2 Carrrie S. Cox, Ex-CFO Bob Bertolini, Ex-GC Tom Sabatino and the rest of the top ten officers at legacy Schering-Plough walked off with more than the $498 million non-reserved charge taken today -- in golden parachute payments -- after they (allegedly) delayed a pivotal null-study result on the cholesterol management franchise for nearly two years. During that time, legacy Schering-Plough sold about $5 billion of that franchise's drugs to the public. As Dr. Harlan Krumholz of Yale said, when the study results were finally known in March of 2008 "this drug may just be a very expensive placebo. . ." So, during those two or so years -- patients did not get more effective drugs, due to the delay. In the end, the executive team busted-up Schering, sold it off, and pocketed their parachutes (with the help of an allegedly complicit Compensation Committee of the legacy Schering-Plough board).
The culture Mr. Hassan promoted as a supposed "turnaround artist" was largely antithetical to good science, and careful patient-focused care. It was all about slick marketing studies -- like ENHANCE (a study not completed until well after FDA approval of the drug being "studied"). No doubt, RMS Schering has some problems when Hassan, Cox, Bertolini and Sabatino and the rest joined in March of 2004 -- but the idea that they steered it directly into the iceberg, so that they could personally profit (and profit wildly) from its bust-up (all allegedly) should be compared with equal distain to the role of the banksters in the financial meltdown of 2008.
There can be no doubt that the Merck and Schering shareholders lost far more than the two-thirds of a billion -- for which New Merck is paying today. New Merck has a blotch on its once stellar reputation (most admired company for seven straight years, in the late 1980s), thanks in large part to the "buccaneer's" attitiude -- of the legacy Schering "turn-around" executive team. People aren't as likely to think that the best treatment will be promoted by Merck, post the ENHANCE debacle.
And that's very unfortunate. Thanks Fred, Carrie, Bob and Tom!
Here's a bit from Reuters:
. . . .Merck. . . said it has agreed to pay $688 million to settle two U.S. investor lawsuits over its disclosures concerning the Enhance drug study released in early 2008.
Two federal lawsuits led by several pension funds alleged that Merck and Schering-Plough Corp knew more than a year in advance that the trial known as ENHANCE was a failure, but withheld that information from investors. . . .
Merck said it has recorded a $493 million after-tax charge for the settlements. It said this reduced previously-reported fourth-quarter profit per share to 30 cents from 46 cents. . . .
It is baffling that each of those people still hold very responsible positions in corporate America -- and in most cases, at public health care companies. Baffling. [I should note the that legacy Merck team bears some responsibilty here, too -- as co-venturer on Vytorin. But only some. As anyone who has read the public emails (produced in the federal ENHANCE securities class action litigation) well-knows, the sharp end of the marketing speer was almost always being held by, and brandished about, by Schering-Plough people.]