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Merck Hometown Feels Effects of Company's Woes


From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

Two looks now at communities in transition. For the drugmaker Merck, it's been a tough year, to say the least. The company is facing 7,000 lawsuits, 7,000, from people who say they suffered heart attacks while taking its pain pill, Vioxx. Faced with a huge legal bill, the company announced plans recently to cut 7,000 jobs and close several plants. Nancy Solomon reports about the many people who are hurt by the company's fall from grace.

NANCY SOLOMON reporting:

It's a long way from the courtroom where the Vioxx lawsuits are being tried to Danville, Pennsylvania. But the people of this small town on the banks of the Susquehanna River are feeling the effects of those suits in a very immediate way. Merck has a manufacturing plant here that the company plans to close, laying off 450 workers.

Mayor ED COLEMAN (Danville, Pennsylvania): We're going to take a major hit by Merck leaving the area.

SOLOMON: Danville Mayor Ed Coleman has spent his whole life here. He's watched the major industries leave and the handsome retail shops on Main Street convert to dollar stores and cheap restaurants. Losing Merck is especially frustrating for Danville because it seemed to be beating the fate of so many small towns that have watched the demise of their manufacturing base.

Mayor COLEMAN: It's going to, of course, bring down housing. You're not going to have the people here. It's going to trickle down right to the businesses, to the food stores, to everything. It's just gonna have a tremendous, terrible impact on Danville.

SOLOMON: These aren't just any jobs the town is losing; they're among the best jobs in central Pennsylvania. Merck pays well and provides good benefits. It also donated money to local schools, Danville non-profits and even helped build a new bridge. According to the US Department of Labor, drug manufacturers on the whole employ a better-educated work force, pay more and have fewer occupational risks than other industries.

(Soundbite of cash register)

SOLOMON: Danville still has a five and dime, and owner Tom Bider(ph) seems to know just about every person who comes in.

Mr. TOM BIDER (Store Owner): Hey, take care, Bill.

BILL: All right. See you later.

Mr. BIDER: Merry Christmas.

BILL: Merry Christmas to you.

SOLOMON: Bider says the people of Danville follow the news about Vioxx, but don't recognize Merck as the corporate villain portrayed in the media.

Mr. BIDER: Should they pay for any damage that was done? Absolutely. And I don't think anyone--anyone--would say they shouldn't. The degrees at which they're pressing these things are too far, as far as I'm concerned, way too far. So, you know, the cure is worse than the disease or whatever you want to say.

SOLOMON: The catchphrase `frivolous lawsuits' comes up a lot in conversations around Danville, but James Hackney, a law professor at Northeastern University, says the tort system was designed as a social safety net to protect consumers.

Professor JAMES HACKNEY (Northeastern University): It's easy to scapegoat the tort law system and to say, `Well, isn't this yet another indication of personal injury compensation run amuck and, therefore, leaves displaced workers?' Yeah, I think it's usually a lot more complex story.

SOLOMON: Hackney suggests a closer examination of executive salaries and pressure to increase the company's stock price.

Another complicating factor is the stellar reputation Merck had before Vioxx. This is, after all, a company whose slogan is `Medicine is for people, not profits,' and its researchers were celebrated for bringing the world life-saving drugs like penicillin and the measles vaccine. But now Merck could lose some of its best scientists to rival drugmakers. William Hanlon is a research scientist at Merck who now shepherds new drugs through the FDA approval process.

Mr. WILLIAM HANLON (Research Scientist, Merck): I have noticed that there is an increase in executive recruiters calling me. I have no doubt that there will be an increase in companies pursuing Merck scientists. And I think that the current environment is going to make it difficult for Merck to attract other scientists because it's viewed as being an unstable time.

SOLOMON: Hanlon says he isn't going anywhere. He still believes in the company and that its reputation will eventually be restored. Even people in Danville, Pennsylvania, have some hope. Merck doesn't plan to close the plant for two years, and by then town leaders say they may find another pharmaceutical company willing to buy the facility and retain the jobs it provides. For NPR News, I'm Nancy Solomon. Transcript provided by NPR, Copyright NPR.

Nancy Solomon