1. Gardasil 2008-09 Arthur W. Page Society

2. Agenda  Why pick Gardasil?  Background  Marketing & Communication  Advertising campaign  Present Issue Status  Financial Impact  Page Principles

3. 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

4. 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.

5. Background (cont)  In 2007 Merck & Co. grossed just over $18 million in profits  Texas Governor Rick Perry passed legislation in 2008 requiring girls entering 6 th 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.

6. 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.

7. Advertising Campaign Click on the ads to view Gardasil commercials

8. 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

9. 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

10. 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

11. 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 www.Gardasil-Talk.com  Blogs

12. 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

13. Financial Impact  Gardasil costs $ 360 for three doses  In 2008 Merck & Co. ranked 4 th 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

14. Financial Impact (cont)

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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