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Merck GC on Why Top Lawyers at His Company Become CEO

June 1, 2016, 2:34 PM

As a former partner at two Big Law firms, and a former federal prosecutor, Merck General Counsel Michael Holston is at home in the courtroom.

But while that’s an asset as a general counsel, it can also be a temptation: “The natural tendency of any leader is to spend the most time in the area they’re most comfortable,” Holston said. “I’ve actually tried to fight that instinct.”

Last year, he gave in. In a class-action lawsuit over Merck’s Vioxx painkiller, pulled from the shelves in 2004 after it was linked to heart attacks and strokes, Holston appeared in court alongside the company’s lawyers from Cravath and Paul Weiss.

“Because I had worked on Vioxx for years as an outside lawyer, and given the importance of the case and my comfort level in that space, I thought it was worth my time to invest in that case,” Holston said.

He added that it’ll probably be the last time he does so, as a GC. Merck settled the case , the latest in a decade’s worth of Vioxx litigation, for $830 million earlier this year.

Headquartered in Kenilworth, N.J., Merck & Co., Inc., is one of the largest pharmaceutical companies in the world. The company made more than $39 billion in revenue in 2015. Holston said he has about 200 lawyers in his legal department.

Before coming to Merck as the company’s chief ethics and compliance officer in 2012, Holston was a nationally-known litigator at Morgan Lewis and Drinker Biddle and an assistant U.S. attorney in the criminal division of the U.S. Attorney’s Office in Philadelphia. He was also GC at Hewlett-Packard from 2007-2011.

Last week, Holston spoke with Big Law Business about his litigator days, the GC’s role at Merck, and the important legal issues facing pharmaceutical companies.

Below is an edited version of the first installment of the interview.

[caption id="attachment_17584" align="alignleft” width="275"][Image “Photo courtesy of Merck” (src=https://bol.bna.com/wp-content/uploads/2016/05/Michael-Holston-e1464719946359.jpg)]Photo courtesy of Merck[/caption]

Big Law Business: Talk about your relationship with your predecessor, Bruce Kuhlik. Will the legal department look any different under your watch?

Holston: Bruce and I have known each other since the 1990s. Bruce is, in my view, and I think the view of most, the best FDA lawyer in the world, the best pharmaceutical regulatory lawyer in the world.

We crossed paths regularly for clients when we were at different law firms, including for Merck. Then, while I was general counsel at HP, Bruce was elevated to be the general counsel at Merck. We saw each other at meetings of general counsel and stayed in touch. As he was getting closer to retiring, he and Ken [Frazier] reached out and asked if I would be interested in coming in to succeed Bruce, which was a great opportunity.

The Merck legal department is world class. It’s actually got an incredible history. Before me, you basically only have four general counsels spanning more than 40 years. I knew all four. Obviously, one of them, [Frazier], has become our CEO, which speaks, to some degree, to the respect for the legal department within the company, as well as, in my view, externally.

Big Law Business: Many companies didn’t think of the GC as a part of the core management team until relatively recently. It sounds like that’s always been the case at Merck?

Holston: Yes, in fact, Ken is not even the first general counsel to become the CEO. He’s the second. The first one was all the way back in the 1960s. Merck has really been at the forefront of the GC having a significant role on the management team and executive team in big companies.

Big Law Business: You were a litigator at two big firms, and then the DOJ, before you went in-house. How would you compare and contrast those two chapters of your career?

Holston: The natural tendency of any leader is to spend the most time in the area they’re most comfortable. I’ve actually tried to fight that instinct. You need to make sure you spend time and learn the areas you need to learn.

When I first took my last job as general counsel I think I dove into more matters of litigation, then I felt at the end that maybe I needed to pull back from some of these, although they are fascinating to me. I need to make sure I’m getting engaged in only the most significant pieces of litigation, and make sure I devote adequate time to all of the other responsibilities I have.

That’s one personal difference of how I’ve attacked it. In terms of the managing of it, it is different. When you are the trial lawyer you run the case. You live and breathe it every single day until the case is over. I’m managing a portfolio of cases in litigation that is within a broader collection of responsibilities that I have, so, you have to come in at a higher level and stay at a higher level.

That said, one of our more significant pieces of litigation is the Vioxx securities class-action case that we announced the settlement for several months ago. I actually had entered my appearance in that case to be co-trial counsel with the lawyers at Cravath and at Paul Weiss.

Because I had worked on Vioxx for years as an outside lawyer, and given the importance of the case and my comfort level in that space, I thought, it was worth my time to invest in that case. I anticipate that, if I get to be the general counsel for a very long time, that’ll still be the one and only time I do that in my career. It was interesting to roll up my sleeves again.

Big Law Business: You’ve mentioned Vioxx. What are some other big issues on your plate?

Holston: I think one of the reasons that pharmaceutical companies, and Merck in particular, have GCs so close to the business is the regulated nature of the business. There is no industry more regulated. There are certainly other heavily regulated industries, but no industry more regulated than ours.

It makes the job more interesting, makes you more of a partner with your clients. Today, I’d say, internationally, one of the areas we’re paying the most attention to is the protection of our intellectual property rights. You’ve seen challenges in certain countries to respecting the intellectual property rights of pharmaceutical companies, and that’s a big issue. It remains an issue in the United States as well.

And then there are issues around the First Amendment, in terms of what pharmaceutical companies and medical device companies are allowed to say about their products. There’s been a lot of litigation in this space in the last year or two.

We have not, Merck, directly been involved in it, but it’s obviously an area of significant interest. We are trying to help shape the conversation down in Washington, D.C., around those issues.

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