Business Strategy - Decisions Without Blinders

By the time Merck withdrew Vioxx from the market in September 2004 out of concern that the pain relief drug was causing heart attacks and strokes, more than 100 million prescriptions for it had been filled in the United States alone. Researchers now estimate that Vioxx may have been associated with as many as 25,000 heart attacks and strokes. And more than 1,000 claims have been filed against the company.

Evidence of the drug's hazards was publicly available as early as November 2000, when the New England Journal of Medicine reported that four times as many patients taking Vioxx experienced myocardial infarctions as did those taking naproxen. In 2001, Merck's own report to federal regulators showed that 14.6% of Vioxx patients suffered from cardiovascular troubles while taking the drug; 2.5% developed serious problems, including heart attacks. So why, if the drug's risks had been published in 2000 and 2001, did so many doctors choose to prescribe it?

Social science research has shown that without realizing it, decision makers ignore certain critical information. Doctors, like the rest of us, are imperfect information processors. They face tremendous demands on their time and must make life-and-death decisions under highly ambiguous circumstances. In the case of Vioxx, doctors more often than not received positive feedback from patients taking the drug. And, as we now know, the Merck sales force took unethical steps to make Vioxx appear safer than it was. So despite having access to information about the risks, doctors - even those who had read the New England Journal of Medicine article - may have been blinded to the actual extent of those risks.

And why did Merck's senior executives allow the product to stay on the market for so long? Evidence points to intentional misrepresentation by the sales force, but it is quite possible that some members of Merck's top management team did not fully understand how harmful the drug was. In fact, many respected individuals have vouched for the ethics of former chairman and CEO Raymond Gilmartin, insisting that he would have pulled Vioxx from the market earlier if he had believed that it was killing people. Although senior executives are, ultimately, responsible for what happens in their organizations, the lapse here may have been more in the quality of their decision making than in any intentional unethical behavior.

In this article, we'll examine the phenomenon of bounded awareness - when cognitive blinders prevent a person from seeing, seeking, using, or sharing highly relevant, easily accessible, and readily perceivable information during the decision-making process. "The information that life serves is not necessarily the information that one would order from the menu," notes Dan Gilbert of Harvard University's psychology department, "but like polite dinner guests and other victims of circumstance, people generally seem to accept what is offered rather than banging their flatware and demanding carrots."

"Decisions Without Blinders",Max H. Bazerman and Dolly Chugh, Harvard Business Review, January 2006.