I need to awnser this for 4 questions of a reading I will upload.

1. Complete a 4 'I's analysis for the case: Identify the issue, the interests, the relevant political institutions, and the relevant information (both technical and politically relevant)
2. What were Merck's objectives (primary and contingent) with its nonmarket strategy?
3. Provide three specific examples of implementation activities used by Merck in the case.

Responsible Lobbying? Our goal is about cervical cancer prevention, and we want of genital warts. Gardasil was highly effective for women to reach as many females as possible with Gardasil. We're who had not been infected and less effective for women who concerned that our role in supporting school requirements had HPV. is a distraction from that goal, and as such have suspended Merck priced the vaccine at $360 for the three injections our lobbying efforts. and was also working on programs for the use of Gardasil in Dr. Richard M. Haupt, Merck, February 20, 2007 developing countries at much lower prices. Analyst Steve Caution: Too much lobbying may result in an overdose of Brozak of W.B.B. Securities projected sales of Gardasil at $1 billion a year and billions more if states mandated vaccina- suspicion. Push too hard and you may experience political acid reflux. tion.Sales in 2006 were $235 million. Prior to FDA approval, Merck began to develop a market Ellen Goodman, Boston Globe, March 1, 2007 for Gardasil. It launched an intensive campaign to get states to make vaccination mandatory for girls entering middle school. INTRODUCTION The campaign generated a backlash against mandatory vac- In 1965 a German doctor, Harald zur Hausen, received a post- cination, and Merck suspended its campaign. Merck had to doctoral fellowship at the University of Pennsylvania where he reflect on its failure and decide what to do next first conjectured that cervical cancer was caused by a virus. 86 in 2005 Merck had sales of $22 billion and profits of $4.6 Subsequently, the human papilloma virus (HPV) was identified billion. The company, however, was fighting on a case-by-case as the cause of cervical cancer. HPV was transmitted only basis hundreds of thousands of lawsuits on its painkiller drug through sexual activity, often had no visible symptoms, and Vioxx, which the company had withdrawn from the market in was generally eliminated by the body's immune system. 2004. The company had established a reserve of $970 million Nevertheless, the Food and Drug Administration estimated that for Vioxx litigation expenses. Merck's biggest drug, Zocor, had worldwide there were 470,000 new cases of cervical cancer a lost patent protection in 2006, and another of its major drugs, year and 233,000 deaths a year. In the United States there were Fosamax, would lose patent protection in 2008. 9,710 new cases and 3,700 deaths a year. Treatment for cervi- cal cancer cost the Medicare system $1.7 billion a year, and GARDASIL AND APPROVALS private insurance paid more. Karen Lustgarten of Planned The technology used in Gardasil was developed in 1993 by CSL Parenthood said, "Cancer prevention is preferable to cancer Limited of Australia, which discovered how to make tiny shells treatment at any age."87 hat would lead the body's immune system to attack HPV. The Approximately 80 percent of all cervical cancers were National Cancer Institute and Medimmune, Inc. began working caused by HPV types 16, 18, 31, and 45. In 2006 Merck to develop a vaccine, and Medimmune later licensed its tech- received FDA approval for the first vaccine, Gardasil, for nology to GlaxoSmithKline. HPV. Gardasil protected against types 16 and 18, which Dr. Kathrin Jansen of Merck also began working on a accounted for 70 percent of cervical cancers and 90 percent vaccine in 1993, and Merck licensed the technology from CSL in 1995. Jansen conceived of using a yeast to make the shells. Merck had a large library of yeast that had been developed for 86 He received the 2008 Nobel Prize in Medicine for his discovery. 87 Palm Beach Post, February 20, 2007. 88Over 100 types of HPV had been identified. 89 Associated Press, January 30, 2007.research on a hepatitis-B vaccine, and Jansen and Merck yeast experts succeeded in developing ways to grow large quantities of the shells. This research provided the foundation for Gardasil.\" Gardasil was approved on June 8, 2006, for protection against HPV types 16 and 18 for cervical cancer and against HPV 6, ll, 16, and 18 for precancerous lesions and genital warts for women 926 years. Gardasil was also approved for use in a number of other countries including Mexico, Australia, Canada, and Brazil. The European Agency for the Evaluation of Medicinal Products approved the vaccine in October 2G36 for the 25 member nations of the European Union. The Centers for Disease Control (CDC) Advisory Committee on Immunization Practices recommended that women between 9 and 26 years of age be vaccinated against HPV and that vaccinations be given at ages 11 and 12 before girls became sexually active.\" Vaccination was intended not only to protect the person vaccinated but also to reduce the likelihood of transmission of HPV. Gardasil was endorsed by the American Academy of Pediatrics, which stopped short of recommending mandatory vaccinations?2 I-IPV was primarily transmitted through sexual activity. A CDC survey of physicians revealed that 46 percent would vaccinate 1012-year-olds and 89 percent would vaccinate 1618-year-olds. Some 11 percent believed that vaccination might increase sexual behavior.\" A survey of pediatricians published in the Journal of Adolescent Health, however, reported that \"half the pediatricians expect parents to resist vac- cinating their child against any sexually transmitted infection. About 42 percent expect parents to fret that immunization may lead to riskier sexual behaviors, and fully 7'0 percent said they expect safety concerns about the HPV vaccine to weigh on par- ents' decision to immunize children."94 The CDC Advisory Committee also voted to add Gardasil to the federal program that pays for vaccines for low- income children up to 18 years of age. This vote was impor- tant because private insurers would then cover the vaccination. WellPoint, Incorporated, one of the largest private health insur- ers, announced that it would provide coverage. Gardasil was effective in stopping cervical cancer among those who did not have HPV, but its effectiveness in the 926 age group would be lower because many of the women already had HPV. A study of \"female students at Rutgers University in New Jersey found that 26 percent were already infected with HPV when they arrived as freshmen. The rate was 60 percent after 3 years of college?\" Merck had tested Gardasil on boys ages 915 for pre- vention of genital warts and head and neck cancer, and addi- tional tests were underway. Merck had not yet sought FDA approval for Gardasil for males. Initial testing had shown that WThe National Cancer Institute and Medimmune used host cells from buttery caterpillars, hut scaling to large quantities proved difficult \"A booster shot might be required 5 to 10 years after the vaccination. Merck was monitoring women who had been vaccinated \"was 3m Journal, April 16, 2007. \"Wall Street Journal, May 17, ems. \"Wall Street Journal, November 30, 2115. \"we: Sam Journal, November 21, m. it was likely to be effective for the prevention of genital warts. Although Gardasil had only been approved for females, doctors could prescribe the drug for males. Insurance plans, however, were not required to cover prescriptions for males, since the drug had not been approved for them. GlaxoSmithKline (GSK) was close behind Merck in developing an HPV vaccine. A 2004 article published in the medical journal Lancet reported successful tests of its vac- cine Cervarix. By 2006 GSK had tested its vaccine on 16,000 women worldwide and had Phase III clinical h'ials under way on 35,000 women in 25 countries. The company had submit- ted a marketing application with the European Agency for the Evaluation of Medicinal Products in March 2006 and planned to submit an application to the FDA for marketing approval in the spring of 2007. One Phase III study showed that Cervarix was 100 percent effective for women 955 years of age. GSK estimated that the market for HPV vaccines could reach $7.5 billion within a few years. The CDC issued a publication, Human Papillomavimr: HPV Information for Clinicians, for health care professionals. In the publication the CDC wrote, \"Although this vaccine offers a promising new approach to the prevention of HPV and associated conditions, this vaccine will not replace other pre- vention strategies, such as cervical cancer screening... . Vaccine providers should notify vaccinated females that they will need regular cervical cancer screening as the vaccine will not provide protection against all types of HPV that cause cervical cancer.\" Pap tests introduced in the 1950s had reduced the death rate from cervical cancer by 70 percent, and a new DNA-based test for HPV had recently been approved by the FDA.96 MARKET DEVELOPMENT While conducting Phase III trials, Merck began wrestling with the issues surrounding the marketing of its vaccine. The issues centered on public acceptance, mandating the vac- cine, and obtaining reimbursement from the government and private insurers. Merck also knew that Medimmune and GIaxoS-mithKJine. among others, were working on vaccines. In anticipation of the approval of Gardasil, Merck began developing the market. In 2005 it provided nancial support for a public education campaign, Make the Connection, estab- lished in 2005 by the Cancer Research and Prevention Foundation and Step Up Women's Network.\" The campaign featured the Web site www.maketheconnection.org and included a series of educational events in 15 cities beginning in September 2005. The campaign also included television \"pub- lic service announcements\" similar to the direct-to-consumer advertisements used by pharmaceutical companies. The announcements featured Kimberly Elise and Elizabeth Riihm, 9\"The Pap test was developed by Cornell University pathologist George Papanicolaou. Precancerous lesions identified by a Pap test were typically surgically removed. \"The Cancer Research and Prevention Foundation, fotmded in 1985, provided grants for cancer prevention, education, and prevention programs. Step Up Women's Network, founded in 1998, focused on strengthening community resources for women and girls. who discussed cervical cancer and urged the viewers to contact As she performed songs on the piano, Ms. Baze told the story their doctors. The campaign asked women to make a commit- of her battle with the disease and said she wished a vaccine had ment to talk to their doctors about cervical cancer. For each been available to her. Ms. Baze says Women in Government commitment Merck pledged to contribute $1, up to a maximum paid her a $2,500 fee and covered her travel and lodging. She of $100,000, to the Cancer Research and Prevention Foundation says she didn't receive any money from Merck for the appear- for cervical cancer programs. ance, but the company has paid her $7,500 to speak at three Merck lobbied extensively at the state level in support of other events." 102 mandatory vaccination and conducted a television advertising Women in Government received contributions from campaign for Gardasil. "It aired TV ads featuring young girls Merck, GlaxoSmithKline, and Digene, which had developed skipping rope while reciting the slogan, 'I want to be one less' the first FDA-approved test to detect HPV DNA. 10 Merck's woman to battle the disease." The ads stated that Gardasil Deborah Alfano sat on Women in Government's business "may help protect you' from HPV strains 'that may cause 70% council in 2006. The organization posted model legislation on of cervical cancer.'>98 its Web site. Merck also worked with Women in Government to pro- According to the National Conference of State mote vaccination in line with the CDC Advisory Committee's Legislatures, bills to mandate, fund, or educate the public about recommendation. Women in Government was formed in 1988 HPV and cervical cancer had been introduced in 34 state legis- for elected women in state governments and focused on public latures. Many of the bills were introduced by members of policy issues, particularly those affecting women. One of those Women in Government, and many of the bills requiring man- issues was preventing cervical cancer. In 2004 it launched its datory vaccinations included an opt out provision for religious "Challenge to Eliminate Cervical Cancer Campaign." President or moral reasons. Susan Crosby said, "Cervical cancer can be our first victory in Merck used a combination of traditional lobbying and the war on cancer. By ensuring that women are educated about a public information and advocacy approach relying on tele- his disease and the virus that causes it, and that they have vision advertisements. It increased its budget for lobbying in access to preventive technologies, regardless of socioeconomic states like Texas. status, we can ensure that no more women die of this prevent- Merck was not the only company to work with health able disease."99 advocacy groups to raise awareness of HPV and cervical can- Women in Government released a study, "Partnering for cer and its treatment. The Partnership to End Cervical Cancer, Progress 2007: The 'State' of Cervical Cancer Prevention in a 20-member coalition of medical, public health, and NGOs America," that evaluated the states on their performance on plus GlaxoSmithKline and Digene Corporation, stated, cervical cancer incidence and mortality. The study concluded "Comprehensive vaccination programs work-as we've seen that the states that performed best were those that provided with the significant reduction or elimination of smallpox world- reimbursement for HPV testing. Women in Government also wide and measles in the Western Hemisphere. Today, the concluded that vaccinations were an essential part of the cam- Partnership is making the commitment to play a leadership role paign to eliminate cervical cancer. Crosby said, "To truly in the campaign to end as much of cervical cancer as can be achieve this goal, we must make FDA-approved HPV vaccines prevented with these vaccines and screening in this country." 105 available to all age-appropriate girls and women. That is what GSK provided financial and administrative support for the our recommendations, including the middle school entry partnership. requirement, are designed to do."1 More specifically, the Digene had worked to educate women and govern- organization's policy recommendation regarding "School ments about the importance of testing for HPV and began a Entrance Requirements" was, "States should require cervical direct-to-consumer television advertising campaign in 2006 to cancer/HPV vaccination for girls to enter middle school, in this effect. It expanded the campaign to more cities in 2007. conjunction with other adolescent vaccines required at this Digene also provided support to the Academy for Educational time, and should allow parents to opt out in accordance with Development and the Coalition of Labor Union Women for states' existing exemption allowances (e.g., medical, religious their 5-year campaign to reduce cervical cancer. and/or philosophical)."101 Women in Government held an "HPV & Cervical Cancer STATE ACTIONS Summit" in Washington, D.C., and conducted activities in all the states. The organization held dinners and meetings on HPV Health care programs, and particularly mandated vaccinations, and cervical cancer in a number of major cities in the United were the responsibility of the states. In some states health States. "In early January [2007], Women in Government held a departments were responsible for public health programs such as conference for some 60 state legislators in Marco Island, Fla., vaccination programs. The New Hampshire Health Department paying for their airfare and hotel rooms. One of the speakers decided to provide the vaccine to girls under 18 at no cost, was Christine Baze, a pop singer and cervical-cancer survivor. 102 Wall Street Journal, April 16, 2007. Baze spoke at the 2006 HPV & Cervical Cancer Summit. 8 Wall Street Journal, April 16, 2007. 103At least 25 of the 81 sponsors were pharmaceutical companies. www. 9Women in Government, press release, September 21, 2006. womeningovernment.org/home/support_ sponsors.asp. 100PR Newswire, September 12, 2006. 104www.ncsl.org/programs.health/HPVvaccine.htm. 101 Women in Government, September 12, 2006. 105PR Newswire, September 13, 2006and the governor of South Dakota announced a similar program. In most states legislation was required to provide the funds for such programs or to require mandatory vaccination. A bill introduced in the Florida legislature would require vaccination of girls of age 11 or 12 before they could enroll in a public or private school. Parents were allowed to opt out their children after having received information on cervical cancer. Virginia was moving more rapidly than other states, and the legislature had passed a mandatory vaccination bill. The gov- ernor was reviewing the opt out provision before deciding whether to sign the bill. In Texas Governor Rick Perry issued an executive order requiring that girls entering the sixth grade as of 2008 be vac- cinated against I-IPV.\":\"S For those not covered by insurance he also ordered that the vaccine would be free for girls ages 9 to 18 and covered by Medicaid for women from ages 19 to 21. Krista Moody, a spokesperson for the governor. explained. \"The governor believes we should protect as many young women as possiblerich and poor, insured and uninsured while maintaining parents' rights to opt their daughters out of receiving the vaccine.\"107 CRITICS As the public and organized private groups became aware of Merck's efforts to promote and secure a rst-mover advantage for Gardasil, and particularly mandatory vaccination, criticism grew. The criticism focused not only on Merck's efforts but also on the wisdom of mandatory vaccination and whether a state should wait until more evidence of side effects had accumulated. Critics in Texas claimed that Governor Perry's action was the result of cronyism. Dawn Richardson, president of Parents Requesting Open Vaccine Education, said, \"He's cir- cumventing the will of the people. There are bills led. There's no emergency except in the boardroom of Merck, where this is failing to gain the support they had expected. \"Ins Merck had contributed $6,000 to Perry's election cam- paign. Perry's former chief of staff, Mike Toomey, was a lob- byist, one of whose clients was Merck, and Representative Dianne Delisi, the state director of Women in Government, was the mother-inlaw of Perry's current chief of staff. Delisi had met in September with the governor's budget director for an \"I-IPV Vaccine for Children Briefing,\" according to her calen- dar. She had also met with Toomey three times, and two other Perry staffers had met with a Merck lobbyistmg The wife of Perry's former chief of staff was a nurse who had promoted health and spoken at a Women in Government conference on cervical cancer.\"'] Cathie Adams of the Texas Eagle Forum commented, \"We have too many coincidences. I think that the voters of Texas would nd that very hard to swallow.\"111 'DGI'exas had not mandated two other vaccines approved in recent years for meningitis and whooping cough. 'mNew rent runes. March 14, 2007. \"Associated Press, February 3, mm. The citizens group had worked for opt out provisions for other vaccines. 'mAssociated Press, February 22, 2007. \"oNew York Tunes, February 17, W. \"lAssociatedPress, February 22, 2007. Public criticism of Governor Perry's order grew, and the Texas legislature held a healing on the order and began consid- ering rescinding it. The state House of Representatives voted 118 to 23 to rescind the governor's order, but the Senate took a different approach by passing a bill that prevented the state from mandating vaccinations before 201 1. The House approved the hill on a 132 to 2 revel\" A bill to mandate vaccination began hearings in California in March 2007 and was met with skepticism. Opponents of the bill said the California children would be \"guinea pigs\" and that parents rather than the state should make the decision about vaccinations for a virus that was transmitted by sexual activity. Criticism of the vaccine had begun with some conserva- tive Christian groups claiming it would encourage premarital sex. Stephen Cable, president of Vermont Renewal, echoed a theme of a number of conservative organizations, \"To think that an 11-year old would be forced to take this vaccine, based on the assumption they'll be sexually active, it's more than annoying... . There are a lot of parents who haven't heard about this (legislation). When they do, the hair will be standing up on the back of their necks."113 \"In recent weeks, opposition to state mandates has grown among parents who want the free- dom to make such a medical decision on their own, and who are worried about exposing their children to the unforeseen side effects of a new vaccine. Physicians and consumer advocates have also questioned the need to immunize young girls against a disease that is no longer very prevalent in the U.S. and doesn't develop until much later in life."\"4 A spokesperson for the Center for Medical Consumers stated, \"Parents should be con- cerned that the only company that makes this vaccine is push- ing behind the scenes for mandatory laws."115 Mandating the vaccine also drew fire from family values groups. The Minnesota Family Council said a mandate \"under- mines abstinence and excuses premarital sex. It's not dealing with a contagious disease that someone can get in public. It's specically resulting from a particular behavior.\"11 State senator Janet Greenip of Maryland opposed legisla- tion mandating the vaccine stating, \"The vaccine is very impor- tant, but I'm reluctant to make it mandatory. If it is good, people will do it."1\" Dr. Mark Myers, executive director of the National Network for Immunization Information, however, cautioned, \"A lot of us are concerned that if you allow people to opt out of one vaccine, they will opt out of other vaccines that are due at the same time.\"1 1\" One concern raised was whether Gardasil had been suf- ciently tested in very young girls. Of those tested only 1,184 were preteen girls. The National Vaccine Information Center, an organization formed by parents concerned about the harm from vaccines, reported that through the end of 2006, 385 adverse events had been reported associated with the use of Gardasil. \"2N\" Font Times. April 26, 2002. \"Associated Press. February 22, 2007. \"was simmered. February 21, 2007. \"SWaH $meermd, February 7, 2007. lmFr'oneer Press, February 22, 2007. \"7Assodated Press, January 19, 2am \"shrew font Times, February 1?, 20m. The CDC stated that the adverse events were not a cause for day that a female delays getting the vaccine there is a chance concern. When the FDA approved Gardasil, it ordered Merck to she is exposed to human papilloma virus." Merck spokes- track a number of 1 1- and 12-year-olds in a postmarketing study person Janet Skidmore said, "What we support are approaches scheduled to be completed in 2009. The FDA action requiring a that achieve high immunization rates. We're talking about cer- postmarketing study was common. vical cancer here, the second-leading cancer among women."124 The Health Information National Trends Survey (HINTS) Patti Stinchfield, an immunization expert in Minnesota and a conducted by the National Cancer Institute collected data from member of the CDC's vaccine advisory committee, com- 3,000 women between the ages of 18 and 75. Only 40 percent mented, "It's hard to argue against a vaccine that prevents cer- had heard of HPV and fewer than half were aware of the con- vical cancer in your sisters and aunts and mothers. That's where nection to cervical cancer. A study of 645 adults by the the argument goes if you want to argue against this vaccine." Annenberg National Communication Survey found that 56 per- in response to the criticism, Merck's Dr. Haupt com- cent had heard of HPV and 42 percent had heard about a vac- mented on the views of medical organizations and public health ine. The respondents were asked to read three statements officials, "They believe the timing for the school requirements about the vaccine and asked if they would get vaccinated. is not right. Our goal is to prevent cervical cancer. Our goal is When the statement stated that the vaccine protected against to reach as many females as possible. Right now, school cervical cancer, 63 percent of the women indicated that they requirements and Merck's involvement in that are being viewed were "very likely" or "somewhat likely" to get vaccinated, as a distraction to that goal." 2 Merck suspended its lobbying compared to 43 percent when the statement said it protected but indicated that it would continue its educational efforts against cervical cancer and a sexually transmitted infection. 1 19 directed at health officials and legislators. Critics contended that Merck's lobbying campaign Dr. Joseph A. Bocchini, chairman of an American was intended to obtain mandatory vaccination before Academy of Pediatrics committee on infectious diseases, said, GlaxoSmithKline's vaccine for HPV was approved. Vera Hassner "If the public had enough experience with the vaccine and had Sharav, a critic of pharmaceutical companies, called the HPV enough knowledge about HPV, the question about whether to vaccine campaign the "Help Pay for Vioxx" losses campaign. get the vaccine or give it to their daughters wouldn't be an Cathie Adams, president of the Texas Eagle Forum, com- issue."120 Dr. Bocchini praised the decision by Merck to stop mented on the relationship between Women in Government its lobbying campaign for school-mandated vaccinations. He and Merck, "What it does is benefit the pharmaceutical compa- said that the focus should be on educating parents. nies, and I don't want the pharmaceutical companies taking In April an article in the Wall Street Journal questioned precedent over the authorities of parents." Referring to Merck's the efficacy of mandatory vaccination, suggesting that it would lobbying campaign, she said, "It's corrupt as far as I'm be better to rely on Pap screening. In May researchers published concerned."121 an article in the New England Journal of Medicine analyzing In February two women legislators in Minnesota removed 12,167 women 3 years after vaccination. Whereas Gardasil was their names from sponsorship of a school-mandated vaccine. 98 percent effective for women who had never been infected by The Minnesota Medical Association called for the appointment HPV, it was only 44 percent effective when women who had of a scientific advisory board to study whether the vaccine previously been infected were included. Gardasil was only 17 should be mandated. Minnesota already required vaccination percent effective in preventing precancerous lesions. 128 for hepatitis B, which is sexually transmitted. Debbie Halvorson, the majority leader of the Illinois Preparation Questions Senate, said she would continue to work for a mandatory vac- cination. She said, "If the people out there are thinking that 1. What was Merck's motivation for its market development Merck is doing all this, and pushing our buttons, they need to strategy just step away. The fact that I'm doing what I'm doing has 2. Were the components of its market development strategies nothing to do with Merck." Halvorson had had a hysterectomy responsible? as a result of human papilloma virus. 122 3. Should Merck have been able to anticipate the opposition that developed to its strategy? CLOSING 4. Should it have suspended its lobbying for mandatory vac- cinations? In which circumstances and under what condi- Margaret McGlynn, Merck president for vaccines, responded tions should it resume its lobbying? to critics of its lobbying campaign by stating, "Each and every Source: This case was prepared by David P. Baron based on public sources. Copyright @ 2008 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. Reprinted by permission. 123 New York Times, February 17, 2007. 124 Associated Press, January 30, 2007. 19Cancer Vaccine Week, December 4, 2006. 125 New York Times, February 21, 2007. 20 New York Times, February 17, 2007 26 New York Times, February 17, 2007. 21 Associated Press, January 30, 2007. 27 Wall Street Journal, February 21, 2007. 22 New York Times, February 21, 2007. 128 Wall Street Journal, May 10, 2007