Drugmaker Merck replaces CEO Gilmartin

Thursday, May 5th 2005, 8:30 am

By: News On 6

TRENTON, N.J. (AP) _ Merck & Co. said Thursday that Raymond V. Gilmartin is stepping down effective immediately from the top jobs at the drugmaker, which has been slammed by mounting lawsuits and falling revenues since recalling its blockbuster painkiller Vioxx last fall.

Merck named Richard T. Clark as chief executive officer, president and a director in Gilmartin's place. Gilmartin also is stepping down as chairman although no successor was named.

Clark, 59, is currently the president of Merck's manufacturing division and previously served as the chairman and chief executive officer of Medco Health Solutions Inc., one of the country's biggest managers of prescription drug programs.

Gilmartin, who has served as president and CEO since 1994, will serve as special adviser to the board's executive committee until March 2006, when he will retire. He turns 65 that year.

Just last Tuesday, about 900 Merck shareholders packed the company's annual meeting, with many criticizing Merck's handling of the Vioxx safety issue and at least one shareholder urging Gilmartin to step down.

``I don't blame you for the Vioxx situation, but in America you get paid for success and not for trying,'' William Steiner, of Piermont, N.Y., told Gilmartin.

Two weeks ago, Whitehouse Station-based Merck reported its first-quarter income was down 15 percent, due to much lower sales of its top drug, cholesterol-fighter Zocor, and its September 30, 2004 withdrawal of Vioxx, a popular arthritis drug that had been Merck's No. 3 seller. Merck pulled Vioxx from the market last fall after a study showed it doubled the risk of heart attacks and strokes in patients using the drug for more than 18 months.

As of March 31, the company had been named a defendant in more than 2,300 product liability lawsuits from customers alleging Vioxx caused heart attacks, strokes, kidney damage and stomach bleeding. Last year, Merck reserved a total of $675 million for Vioxx legal matters, but analysts have estimated its liability at anywhere from $4 billion to $30 billion.

The company scheduled conference calls with reporters and analysts Thursday morning to discuss the changes.