Drugmaker Merck promotes key VP to president, prelude to CEO’s retirement next year

Merck promotes key VP to president

TRENTON, N.J. — In a possible move to groom its next CEO, drugmaker Merck & Co. said Wednesday longtime executive Kenneth Frazier is being promoted to president, taking over one of the jobs of CEO Richard Clark, who is retiring next spring.

Frazier, 55, is head of sales and marketing for Merck’s human medicines and vaccines, the biggest division at the world’s second-biggest drugmaker.

Clark, 64, told The Associated Press that the move is the “next step in Ken’s development,” although he would not say whether Frazier has been chosen as his successor.

“Today’s development is the result of a very thoughtful, long-term, continuous planning process by Merck’s board of directors,” Clark said.

With the promotion, Frazier will be responsible for Merck’s human health business, as well as Merck Research Laboratories and Merck’s manufacturing and supply operations.

The company, which is based in Whitehouse Station, said Adam H. Schechter, who worked his way up from a Merck sales representative to head up the company’s U.S. pharmaceutical business, will succeed Frazier as president of the global human health division.

Frazier, a Harvard-trained lawyer, has served in his current position for three years. He joined Merck in 1992 and served as its general counsel from 1999 through 2007.

During that time, he was generally praised for successfully handling the mountain of litigation that followed Merck’s pulling its painkiller Vioxx from the market because it doubled risk of heart attack, strokes and death.

“If anyone has firm-wide credibility it would have to be him,” said analyst Steve Brozak, president of WBB Securities. “This might be viewed, as they call it in politics, as a ‘test the waters’ campaign for transition planning.”

Clark must step down as chief executive officer within a month of turning 65. That would be at the beginning of April 2011. Clark could remain on for some time as chairman of the board, his third position.

“I’m terribly honored” to be chosen, Frazier said in an interview. “It’s my goal in this role to learn as much as I can from Dick and my colleagues, Peter Kim and Willie Deese,” Merck’s heads of research and manufacturing, respectively.

Back in 2004, when former blockbuster Vioxx was pulled from the market, Frazier elected to initially fight the tens of thousands of lawsuits filed by patients alleging harm one by one. After Merck had won a majority of the initial trials, the company settled nearly all those cases for a total $4.85 billion — well below what analysts had estimated as Merck’s liability.

Just Tuesday, however, the Supreme Court allowed a class action lawsuit to proceed for shareholders who collectively lost billions when Merck’s stock value plunged by $28 billion overnight after Vioxx was pulled.