Merck: Investing in Science-Based Business (Abridged)
Ray Gilmartin faces a dilemma. His company's credibility has been damaged by the recent withdrawal of Vioxx, a multi-billion dollar drug. Moreover, the withdrawal of Vioxx would imply that Merck would fail to meet analysts' earnings expectations for 2005 unless Gilmartin cuts the R&D budget. Cutting the budget might hurt morale and productivity in Merck labs.