Merck appoints obscure insider as CEO

US pharmaceutical giant Merck, in troubled times after the withdrawal of a best-selling drug, on Thursday announced the departure of its chief executive and his replacement by a little-known company insider.

Merck confounded speculation on Wall Street that it might choose a star outsider to succeed Raymond Gilmartin as its boss by promoting Richard Clark, a Merck employee since 1972, in his place.

Gilmartin, who was due to retire next March at the age of 65, stepped down as chairman, president and chief executive officer of Merck after nine years.

But the company denied that its beleaguered boss had been forced out early in the wake of the withdrawal of Merck's blockbuster arthritis drug Vioxx, a step that has savaged its earnings and led to thousands of lawsuits.

"He certainly has led the efforts in terms of the Vioxx issue with distinction," Lawrence Bossidy, the former chief of Honeywell International who led the hunt for a new CEO at Merck, told reporters in a conference call.

"So in no way did we push him out," said Bossidy, who is newly installed as chairman of Merck's executive committee. The post of chairman of the board, however, has been left vacant for now.

Clark, 59, who steps up from serving as president of Merck's manufacturing division, said he was "honored" to be chosen.

"As CEO, my priorities are clear -- meeting the needs of patients and building shareholder value," he said.

Asked whether Clark was the committee's first choice, Bossidy said he was their "primary choice."

Merck disappointed investors last month by reporting a 15-percent fall in first-quarter earnings to US$1.37 billion.

The earnings figures came after Merck in September abruptly yanked Vioxx from international sale, in the light of research that showed it doubled the risk of heart attacks and strokes in some long-term users.

A study in January revealed that Vioxx may have caused as many as 140,000 cases of serious coronary heart disease in the US before it was pulled from the shelves.

The US Food and Drug Administration has said the drug can go back on sale, albeit with restrictions, but Merck has yet to do so. Vioxx had 2003 sales of about US$2.5 billion.

Merck now faces about 2,300 lawsuits around the world related to its withdrawal of Vioxx. The company is also being investigated by the Securities and Exchange Commission, the Justice Department and UK drug regulators.

Some analysts have pegged the company's potential legal liability at US$20 billion.

Separately, a Merck executive faced hostile questions on Thursday from a congressional committee about the company's past marketing tactics for the drug Vioxx.

The committee released internal Merck documents that had instructed sales representatives to reassure doctors that Vioxx was not toxic to the heart.

"Merck's sales representatives were trained to sell as if lives depended on it," said Democratic Representative Henry Waxman of California. "Ultimately, their message may have cost lives."

Republican Representative Mark Souder of Indiana said, "The real question we want to know is: Can we trust you?"

Dennis Erb, a Merck vice president, defended Merck, saying, "I believe in the safety of Vioxx."

Erb said Merck was in preliminary discussions with the Food and Drug Administration about what information the agency would require before considering whether to let Vioxx back on the market. Merck has not decided whether to seek that approval, he said.