For years, the drug Vioxx, developed and marketed by Merck, was one of the blockbuster drugs on the market. One of a number of so-called Cox-2 anti-inflammatory drugs, Vioxx was considered by many people a miracle drug for alleviating the pain from arthritis and other painful afflictions. Vioxx was marketed heavily on television, prescribed by most physicians, and used by an estimated two million Americans. All of that changed in October 2004, when the results of a large study were released. The study, which followed approximately 2600 subjects over a period of about 18 months, concluded that Vioxx use over a long period of time caused a significant increase in the risk of developing serious heart problems. Merck almost immediately pulled Vioxx from the American market and doctors stopped prescribing it. On the basis of the study, Merck faced not only public embarrassment but the prospect of huge financial losses.

More specifically, the study had 1287 patients use Vioxx for an 18-month period, and it had another 1299 patients use a placebo over the same period. After 18 months, 45 of the Vioxx patients had developed serious heart problems, whereas only 25 patients on the placebo developed such problems.

Given these results, would you agree with the conclusion that Vioxx caused a significant increase in the risk of developing serious heart problems?

1. What type of hypothesis test would you use?
2. What is the null hypothesis in your chosen type of test?
3. What is the p-value of your test, and what is your conclusion about your null hypothesis?
4. Did Merck make the best decision?Answer from the perspective of different groups of people, including those who the drug really helped with the pain, those who developed heart problems.