Trustee Chair Vagelos ends successful tenure at Merck

Today marks the end of a major phase of Roy Vagelos' life. After working nearly 20 years at Merck & Co., Vagelos retires today from his position as chief executive officer. But the new chairperson of the University Board of Trustees said he is looking to the future. "I want to be sure we are as prominent as possible," Vagelos said last night. "The University is in a terrific position. It is one of the best places in the world and we want to make it more so." Merck is helping Vagelos in that effort -- recently donating a $1.5 million dollar chair in Molecular Biology and Biochemistry in his name. Now that he is retiring from Merck, Vagelos said he will be able to devote much more time and effort to the University than he has done previously. "Although I have been a Trustee, I have been extremely busy with Merck up until today," he said. "Therefore, focusing on the projects I will be wanting to concentrate on is a little premature." "I have not been that close to the students because I haven't spent enough time at Penn," Vagelos added. "Now, I will." Vagelos, who has served as a Term Trustee since 1988, said he will be on campus later this week "and every week from now on." Vagelos said the Campaign for Penn drive, the recruitment of deans and the response to public issues have been very important to the Board of Trustees and his work on the Board in the past. He said he could not be sure what issues he would concentrate on in the future. On the academic front, Vagelos said his interest lies in science. He said he loved the subject ever since he was a young boy. But his ultimate decision to become a biochemist came during an organic chemistry course he took at the University in 1948. "I took a course which many students were not too excited about," he said. "I had been thinking of going into chemistry but when I took that I was sure." After graduating from the University in 1950, Vagelos worked for Merck as an intern but did not return there until 1975. As a biochemist and enzymologist, Vagelos began his career at the National Institutes of Health and at Washington University. But he has spent most of his life at Merck, starting as head of research in 1975 and serving most recently as CEO of the world's largest pharmaceutical company. He served at Merck for 19 years, and has been its CEO since 1985. Vagelos is officially retiring today, complying with the company's mandatory retirement age of 65. While at Merck, Vagelos led the company to many accomplishments. He did deal with several minor controversies during his term, though. Vagelos' major accomplishment at Merck was the $6 billion acquisition of Medco, a nationwide mail order pharmacy and managed care drug company, which occurred in July 1993. But Vagelos has faced some opposition in regard to some of his views and ideas on health care issues. Merck developed a plan last June to manage pharmacy benefits under Medicare. Under the proposal, outpatient drug coverage would be managed by pharmacy benefit management companies, such as Medco. But pharmacists and others objected because they felt Merck could gain a competitive advantage since it could promote its own products under the program. In August 1993, the Toronto Star criticized Vagelos for opposing a new U.S. program to provide free vaccinations to poor children, saying the position would be detrimental to "future research in developing new vaccines." Vagelos prefers to reflect positively on his accomplishments. He said he considers some of his work internationally as his most important. He was responsible for the decision to send Merck's technology and expertise to China for the production and use of the hepatitis B vaccine. And during Vagelos' tenure as CEO, Merck also developed Mectizan, a drug that can treat river blindness, a disease mostly concentrated in Africa. Merck donated the drug to the African countries in need of treatment for the disease. Recently, Vagelos said, he and former President Jimmy Carter celebrated the treatment of the 10 millionth patient of Mectizan. "We've done things in the developed world and introduced important drugs there," Vagelos said. "But these special cases where drugs have a unique ability to do good in places where you cannot sell the products are especially fantastic." From 1986 to 1992, Merck received the Most Admired Company in America award from Fortune magazine. Vagelos's salary reflects his achievements. Last year, he was paid a salary and bonus of $2.4 million, plus a long-term incentive payment of $1.3 million in 19x93, according to the Houston Post.