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Vioxx Verdict Could Spur Big Changes

Posted on: Monday, 19 September 2005, 03:00 CDT

WHITEHOUSE STATION

Experts see a shift away from blockbuster drugs and more openness about risk

This month's landmark verdict against Merck for its aggressive marketing of the painkiller Vioxx is likely to become a catalyst for sweeping changes in how the pharmaceutical industry goes about researching and selling drugs.

The $253 million verdict shook Whitehouse Station-based Merck and put its future financial strength in doubt as estimates soared on the number and cost of the Vioxx-related claims the company will ultimately face.

Jurors in the Arlington, Texas, case found that Merck failed to adequately warn patients of the cardiac risks of taking Vioxx before the drug was removed from the market last year. They decided in favor of Carol Ernst, the widow of a 59-year-old man who died in 2001 of a heart condition linked to arrhythmia, or irregular heartbeat, while taking Vioxx.

The 10-2 decision by the jurors in the Ernst case has major implications for Merck, which says it plans to fight every Vioxx case filed against it, a project that could take years, and for an industry that is a mainstay of New Jersey's economy. The next Vioxx case is set to go to trial on September 12 in Atlantic City.

Many experts say the Vioxx verdict will trigger dramatic, industry-wide changes in how health risks associated with drugs are conveyed to patients, physicians and regulators.

Industry experts and insiders who spoke with NJBIZ last week shared a broad consensus of the post-Vioxx era: It will be characterized by more disclosure of drug risks, a tougher stance by regulators and a return to a more restrained approach to advertising.

Several sources said they expect the research orientation of industry giants like Merck and Pfizer to shift away from mass- market blockbuster drugs with annual sales of a $1 billion or more. Instead treatments for smaller but often sicker groups of patients are more likely to be in vogue.

The sight of Merck grappling with a total tab for Vioxx claims that could rise to $30 billion has clearly rattled the industry. Richard Stefanacci, executive director of the Health Policy Institute at the University of the Sciences in Philadelphia, says companies will be wary of the "increased risk of very expensive legal actions as a result of adverse side effects." He thinks they will focus instead "on diseases managed by specialists where the risk of the medication can more easily be taken into account."

"Blockbusters in the future will get tremendous scrutiny," says Geert Cauwenbergh, CEO of Barrier Therapeutics in Princeton, which is developing treatments for dermatitis and other skin conditions. "I believe in the future we will move back to more realistic approaches to drug development." Cauwenbergh says the shift can already be seen in the interest a number of pharmaceutical companies have shown in specialty drugs given to patients in hospital settings.

This could be good news for many small pharmaceutical and biotech companies that may find themselves ardently pursued by pharma giants. But Cauwenbergh says it could also mean cutbacks in the big research and development staffs and budgets that have long been a hallmark of the big companies.

Ken Moch, CEO of Alteon in Parsippany and chairman of the Biotechnology Council of New Jersey, expects more research emphasis on drugs "where the risk profile is less complex." Moch says that means more drugs aimed at treating cancer and other life- threatening conditions and fewer drugs aimed at conditions like hypertension.

Stefanacci

Instead of trying to stop diseases early on, he adds, drug makers may try to cure them at later stages, "when the FDA isn't going to stop them."

Slower, more demanding reviews of new drugs by the FDA could also become commonplace in the post-Vioxx era. "Regulators will look more closely and demand more information," says Joseph DiMasi, director of economic analysis at the Tufts Center for the Study of Drug Development in Boston.

That will likely translate into more and larger studies of patients taking a new drug, DiMasi says. But slower reviews and more extensive clinical trials mean fewer new drugs reaching the market, warns Bill Healy, executive vice president of the HealthCare Institute of New Jersey in Hillside, a pharmaceutical industry trade group. In the wake of Vioxx, says Healy, drugmakers "will be even more cautious than they have been."

Vioxx goes from profit center to loss leader.

Greater caution may mean more disclosure of possible health risks of a drug-even if the risk hasn't been established to a scientific certainty. Merck argued in the Vioxx case in Texas that while there had been hints of cardiac problems linked to the drug, no body of clinical data had established the risk with certainty until last year. Once the data was available, the company says, it acted promptly by pulling the drug off the market in September 2004.

The Texas jurors made short work of that defense. They saw Merck executives as willfully delaying learning facts that could force them to forego a key source of profits during the five years that Vioxx was on the market. The drug's annual sales totaled $2.5 billion in its last full year on the market.

The jury tallied the punitive damage portion of their award with an eye toward poetic justice. They set the amount-$229 million-to match the company's estimated Vioxx sales during one four-month period in which the company fought FDA efforts to put more information about possible cardiac risks on the drug's label.

Moch says future drug labels should include discussions of possible risks that haven't been proved with certitude. He says the warning could begin with a phrase like, "These are the things we have seen that we are concerned about."

Cauwenbergh says labels should include any possible side effects of a drug that appear during toxicity testing in clinical trials and don't show up among patients receiving a placebo.

Meanwhile, industry experts look for big changes in direct-to- consumer advertising of drugs on television. PhRMA, the national trade group for the pharmaceutical industry, issued a set of voluntary advertising guidelines for companies to follow last month. But some members of Congress favor tougher action to make sure ads don't make inflated claims or gloss over risks.

Cauwenbergh sees the need for reform. The ads, he says, have "really become a way of arm twisting the doctor." Such marketing "needs to be more regulated or self-regulated than it is today."

E-mail to wquinn@njbiz.com

Copyright Snowden Publications, Inc. Aug 29, 2005

Source: NJBIZ

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