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This paper examines the Food and Drug Administration's regulation of drug safety. In one of the most sophisticated cost-benefit analyses to date, (Cost-benefit analysis of the FDA: The case of the prescription drug user fee acts, The Journal of Public Economics, 92, 1306–1325.) argue that between 1998 and 2005 the FDA's drug submission process under the Prescription Drug User Fee Act (PDUFA) increased social surplus by $14–31 billion. However, this conclusion is based upon inappropriate data that underestimate the welfare costs of drugs that were withdrawn from the market due to their harmful side effects. Once appropriate epidemiological data are used to calculate the welfare costs of a single drug, Vioxx, which was withdrawn from the market after it was found to cause heart attacks, PDUFA I-II are found to have caused a net reduction in social welfare of between $1-201 billion. This indicates that statistically infrequent regulatory mistakes may have large social welfare implications that can counteract the benefits of years of accurate regulatory decisions. Thanks to Sarah Bernhardt, Romit Bhattacharya, Stephen DeCanio, Marco Giani, Colin Jennings, John Meadowcroft, and Tariq Thachil for helpful comments and suggestions. Special thanks to the helpful comments offered by two anonymous referees. [ABSTRACT FROM AUTHOR]

Marketing researchers have proposed various conceptual models of ethical decision-making to better clarify the steps in the decision-making process. However, lacking in the literature is comprehensive empirical validation of these models. This manuscript examines the ethical decision-making model proposed by Ferrell et al. [1989, Journal of Macromarketing 56(Fall), 55–64] in the context of a real-world marketing situation. This model is a comprehensive synthesis of previously developed models in the literature. The events surrounding the withdrawal from the market of the pain reliever Vioxx, manufactured by Merck & Co., are detailed. The analysis provides insights into the decision-making process faced by Merck executives and sheds light onto the real-world applicability of the conceptual model. Furthermore, this study demonstrates how potential modifications to existing models can be developed by their examination in the context of real world events. It is hoped that this analysis, along with future examinations, aids marketing researchers in developing a better understanding of the ethical decision-making process in a business context. [ABSTRACT FROM AUTHOR]

The article discusses ethical concerns regarding the conduct of the pharmaceutical industry in the light of the development and withdrawal of non-steroidal anti-inflammatory drug Vioxx. The growing concerns over the safety and efficacy of Vioxx has forced its manufacturers to withdraw it from the market. The author opines that bioethical aspects in drug manufacturing should be taken into consideration by the drug manufacturers.