We’ve been as surprised as anyone by the Wall Street Journal’s running baseball-style scorecards showing how many lawsuits Merck has won, lost and tied.

It’s notable. Merck is using a starkly different strategy than the one that was popular not that long ago. Remember the Fen-Phen mess? That saga is about to have its 10th anniversary. It’s going strong, thanks to unscrupulous lawyers, physicians, laboratories and consultants bilking the company that inherited the legal scam, best documented by Forbes last year.

Merck looked at the Fen-Phen fiasco and mapped a different strategy. In throwing big bucks and tenacious lawyers at each Vioxx case, Merck correctly gambled that many patients and ambulance-chasers would have a hard time proving the drug caused their health problems.

We are certain there are legitimate Vioxx victims out there. We have considerable sympathy for them. But a majority of juries of ordinary citizens have so far been unmoved by tearful Vioxx plaintiffs or their surviving family members.

As it happens, what with a website to run, ClinPage is not one of the 27,000 entities suing Merck at this time. But if we were, we’d drop our case and sue some frail, vulnerable prey like a multinational oil company or Lloyd’s of London.

Speaking Up

All of this does not mean Merck is out of the woods. The February issue of the Harvard Business Review (HBR) has an eye-opening article on the risks of corporations that don’t defend themselves with gusto. Many companies and industries are discussed. But Merck is the article’s poster child.

The HBR authors are Robert Eccles, Scott Newquist and Roland Schatz. They subject news coverage to quantitative analysis. Their firms, Perception Partners and the Media Tenor Institute, help organizations study and manage corporate reputations.

The Mathematics of Reputation

From their research, the authors conclude a positive reputation requires that a fifth of the stories about a company be positive, no more than a tenth be negative, and the rest be neutral. One key to achieving those numbers, in turn, is having a “share of voice” above 35 percent. What is “share of voice”? The percentage of all stories that quote from the company or cite information provided by it. More about “share of voice” in a second.

The HBR article has validated the subjective impression of the American news media, which is that the drug industry is composed of a vast sales army and a smattering of actors and actresses who pose as physicians in TV ads. Many science- and non-science journalists discover that opponents of the pharmaceutical trade are easy to contact and interview. Often in minutes. Such interviewees often possess advanced degrees and deep domain knowledge.

The Price of Silence

When most reporters call a drug company, however, they encounter a brick wall. Dutifully, journalists submit an endless round of requests and reminders of previous requests. Generally, such requests lead nowhere. With luck, a public relations person speaking on behalf of a drug company can be interviewed weeks after a deadline has come and gone. That’s a good ending. (The usual ending is no response at all.)

Here’s one of the most sobering excerpts about Merck from the HBR article: “A woefully inadequate seven percent of stories quoted someone from the company or cited data provided by it, meaning Merck itself didn’t have the ‘share of voice’ required to communicate its positions. …It will be difficult for Merck to rebuild its reputation—especially since its ‘share of voice’ has decreased to 5.5 percent.”

Beyond Merck

Some readers may be saying to themselves, smugly, “Sure, Merck is hurting. But its situation is unique. My company is safe.”

Wrong. That is not what the “share of voice” data show. Here’s another quote from the HBR article: “Even if a small company has a very strong reputation among a small group of core investors or customers, it runs a high risk of suffering considerable damage to its reputation if its media coverage is below the awareness threshold when a crisis hits.”

A little bird has told us that some life science companies regard the news media as a) biased and b) scientifically ill-informed. We amiably disagree with this impression, and could fill a room with journalists to disprove it. But what the HBR article shows is that such disengagement has a price.

Stumped by Stents

The best current example of this is with drug-coated stents. Who can say, at this point, whether they work, why they work, or why any patient should receive one?

The best counter-example is the software industry. Technology companies enjoy excellent relations with the media despite well-known, blockbuster products that (in the case of enterprise email software or personal music players) routinely fail and leave customers with lost data and monumental replacement costs.

Do executives at Microsoft and Apple enjoy dealing with the news media? No. But unlike companies in the life sciences, they correctly see such interactions as one element of maintaining reputations during good times. This maintenance makes the inevitable crises less severe.

Why did Steve Jobs survive his stock-options scandal? Because he’s the Pope of American technology? Sure. But he had also amassed a bag of press chits (or was it tricks?) to cash in, distracting the opposing lawyers when they were circling like demonic vultures above him.

A PDF of the “Reputation and Its Risks” article in the HBR could be found here, last time we checked. If that link goes bad, the reprint number is R0702F.