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We didn't think, even before Vioxx got pulled, that Arcoxia would ever get approved because we thought it had cardiovascular signals-and because of the debate over Vioxx for the last five years. Now, unequivocally, we don't believe it will be approved.
Since merck yanked its anti-inflammatory drug Vioxx (rofecoxib) from the market, the action has been called a corporate disaster, a regulatory failure, a crisis in public health, and even a death blow to the blockbuster model. Is it?
Pharm Exec spoke with a range of experts—an investment analyst, life science consultant, plaintiff's attorney, physicians, former FDAers, and authorities on drug safety, pharmacoeconomics, and pharmacovigilance—to find out. David Wofsy, MD, president of the American College of Rheumatology, believes "there are lessons in the Vioxx recall for everyone," and Lou Morris, PhD, past acting director of FDA's Division of Drug Marketing, Advertising, and Communications and president of Louis A. Morris & Associates, says "people will be studying it for a long time."
With and without Vioxx Merks Estimated 2004 & 2007 Strategic Performance
So, let's begin.
"Momentous, shocking," is how Barbara Ryan, managing director and pharmaceutical analyst with Deutsche Bank Securities, describes the Vioxx recall. Albert Wertheimer, PhD, founding director of the Center for Pharmaceutical Health Services Research at Temple University School of Pharmacy, is more sanguine: "These things happen, unfortunately, now and then," he says. And according to Morris, there have been about a dozen withdrawals in the last 12 years.
We didn't think, even before Vioxx got pulled, that Arcoxia would ever get approved because we thought it had cardiovascular signals-and because of the debate over Vioxx for the last five years. Now, unequivocally, we don't believe it will be approved. Barbara Ryan, pharmaceutical analyst, Deutsche Bank Securities
Still, the Vioxx recall stands out. The largest ever by sales, it also clearly "couldn't have come at a worse time for Merck," Wertheimer says. But it could also be said that Vioxx is less than the disaster that's been depicted, precisely because the company has been faltering. While surely a blow to Merck's earnings and prestige, it is far from a stunning reversal. It's also been years since the company was most admired. Jim Hall, president of the life sciences practice at consultancy Wood Mackenzie, says it was already losing its preeminence as a science-driven pharmaceutical company. Adds Ryan: "Merck hasn't grown its earnings for the last four years, and is not likely to for the next several." The implication is that investors who dumped the stock overreacted, as investors frequently do. An analysis by Tracer Analytics (see below) bears this out. Merck's prospects, either way, are not much changed.
The withdrawal of Vioxx, however, makes Merck's road to recovery steeper. Most obviously, Ryan says, it puts management "in a very precarious position." But she doesn't blame CEO Ray Gilmartin for the Vioxx mess, saying, "I think the company did the right thing." And Wertheimer says, "This was a pretty tough call. You can't just blame it all on Merck." Indeed, Morris offers praise. "How many companies," he asks, "would sacrifice a $2.5 billion product without trying to keep it on the market? It's consistent with Merck's history, taking that kind of perspective on healthcare. From what I can tell so far, they've been incredibly decisive and responsible."
But Ryan reminds us that the recall "follows a lot of other disappointments associated with management decisions," and Hall says there's a real question "whether Gilmartin's the right person to pull them through this." Gilmartin, he thinks, "is going to go. He announced he's retiring in 2006, so he has between zero and 12 months left now. From a patient-customer point of view there are enough questions about Merck and its leadership that announcing a new leader would help restore confidence."
Some say the Vioxx recall makes Merck an acquisition target, or at least narrows its options. More likely, it just makes Merck's existing strategy more urgent. Says Hall: "They're going to have to pump a fair amount of money into R&D, either into the discovery end, which probably won't pay off for a while, or into licensing products. The problem is that to fill the gap in their pipeline, they're going to have to license-in Stage III products, and those are very expensive." While the precipitous drop in their market capitalization may make them more attractive to a buyer, Hall says the downside is that they come with a rather large legal liability.
For FDA, there's a lesson: independent of who the company is, their reputation, or size, they have to look more carefully and communicate more forcefully. Albert Wertheimer, PhD, Temple University School of Pharmacy
With all the uncertainties surrounding the Vioxx recall, "One thing's for sure," Ryan says. "There will be enormous litigation." But the heart of that affirmation is hollow. The big question is how much will it cost, and that, Ryan says, "won't be known for some time." Stuart Talley, an attorney with Kershaw, Cutter, Ratinoff York in Sacramento, California, has a notion about that. If there were 27,000 serious cardiovascular events—the number projected by one FDA-sponsored study—"they're probably looking at somewhere between 5,000 and 10,000 cases," he says. A lot of people are comparing Vioxx to fen-phen, which has cost Wyeth $16 billion so far. But fen-phen, Talley says, "was about people with leaky heart valves but no symptoms. In this case the damages are going to be much worse—a lot of wrongful death cases, people with strokes—a lot of serious damages." The final price tag? Few would be surprised if it surpassed $10 billion.
Talley says plaintiffs' attorneys are competing to get cases because "the firms with the most cases have more control over what happens, and more juice with the defendant." At the same time, Merck will jockey with plaintiffs' attorneys over jurisdiction. "A lot of case law has come down on the side of drug manufacturers," Talley explains. "The premise is because the drug was approved by the FDA, plaintiffs who were injured can't sue on the grounds it is unsafe or had inadequate warnings. The theory is if the FDA approved the drug, they've made the decision it is safe and the label is adequate. So a lot of cases have had problems on the state and federal level." But it varies from place to place. "In some jurisdictions these rulings have no effect," says Talley. "In others, you're completely out of court." That's why there's destined to be a battle over where the cases are heard. Talley believes most "will gravitate to where cases are now filed—Los Angeles and New Jersey."
Talley says the best argument "to get around the 'drug was approved by the FDA so we can't be liable' defense has been, 'Yeah, but you lied to the FDA. It wouldn't have been approved if they had known the truth.'" A big piece of this puzzle, Talley says, "is whether Merck did anything to mislead the FDA—are there smoking gun memos or studies that weren't provided to the FDA?" But a recent Supreme Court decision known as Buckman seems to undercut that argument. It appears to say you cannot sue someone simply for lying to the FDA because, as Talley says, "it's the FDA's job to punish people who lie to them." Defendants have tried to expand Buckman—which involved a consultant to a medical device company—to pharmaceutical companies. They want to claim, "'You can't sue us because you're preempted by the FDA's decision to approve the drug, and you can't sue us for lying to the FDA to get it approved because the Supreme Court says so.'" But the fallacy of Buckman, says Talley, is the FDA "doesn't have the manpower or time to know when they're being bamboozled or things are being spun."
The real question in the public's mind now—not to mention the minds of Merck's competitors—is "to what extent are problems identified with Vioxx applicable to all COX-2 inhibitors," Wofsy says. He predicts FDA "is going to move very slowly in the area of approving new drugs with similar biology." Ryan agrees, saying, "the bar for new COX-2s has been raised," and adding, "There's no data yet for the existing drugs to come off the market. As the placebo controlled trials for Celebrex (celecoxib) come in, that data will be very important."
What about the next-generation COX-2s? Says Ryan: "We didn't think, even before Vioxx got pulled, that Arcoxia (etoricoxib) would ever get approved because we thought it had cardiovascular signals—and because of the debate over Vioxx for the last five years. Now, unequivocally, we don't believe it will be approved." She's also dubious about Pfizer's Prexige (lumiracoxib), which, she says, "has liver and kidney issues."
From a public health perspective, the Vioxx recall "won't have a major impact," Wofsy says. "There were no medical conditions for which it was the only option." But if Vioxx is not an essential medicine, don't its risks—in conjunction with its widespread usage—constitute a public health problem of some sort? Says Wofsy: "It is fair to ask if this could have been recognized and stopped before people were hurt." Ryan is doubtful. "I'm not sure that the kind of data existed prior to this to suggest a move such as what happened," she says. "It is easy to say that there were many hints. By the same token, the data that existed in the public domain since 1999 on Vioxx left even experts arguing both sides. I don't think you can go back and say it was clear and we should have done this or that, because I don't think it was clear. We live in an imperfect world and we know what we know when we know it."
Wofsy takes another tack: "FDA announced the problem so patients and physicians could be aware of it but didn't require the companies to do anything. They left it to further studies to clarify the issue—accidentally. There probably should have been more insistence at an early stage on looking directly at the cardiac issues posed by these drugs. There were enough clues two or three years ago to force a more thorough evaluation. Fortunately, the findings came up in a subsequent study by chance. But it would have been a good idea for Vioxx to have been systematically evaluated." Wertheimer is on the same wavelength. "For FDA there's a lesson: independent of who the company is, their reputation, or size, they have to look more carefully and communicate more forcefully," he says.
But keep in mind, Morris says, "You can't know everything about a drug before it's approved for marketing or else you could never approve any drug." Even Wofsy concedes that, "You have a dilemma, which will always exist in public health. At what point in the understanding of the long-term consequence of a new agent is it acceptable to release it to the public who might benefit from it? And at what point do you withhold a potentially valuable medication because you don't have enough long-term follow-up for possible late adverse effects?"
"People have to be realistic," says Edward Langston, MD, a member of the American Medical Association's Board of Trustees. Langston, a geriatrician and pharmacist by training, believes FDA's rigor in screening new medications is the most severe in the world. "Medications are available in Europe or Asia that aren't here," he says. "We take a very hard look at things. It's difficult and costly. Some people say it's a failed system. It's not. It's working. Everyone wants the perfect answer—the perfect drug—and it isn't out there." It's just not a simple matter to balance risks, benefits, and costs. "We're still learning," Morris says. "It wasn't until thalidomide that we understood the teratogenicity of drugs."
That's not to say improvements aren't needed. "The type of drugs developed today have a much longer-term effect on patients," Hall says. Information needed to understand long-term side effects cannot be obtained in even a multiyear trial. Hall also thinks trials may have to be more specific. Say you treat trials for broad-based indications, such as Vioxx, as more of a specialty. "Then you want to target the 65 and older population that will probably take it for chronic problems," says Hall, who believes clinical transparency should help a lot. "People will have to understand what their strategy is and where the risks are," he says. Langston suggests that "FDA needs more manpower. They have a very challenging job."
"It says a lot about the power and danger of direct-to-consumer (DTC) marketing that the COX-2 inhibitors achieved a popularity in the market that far exceeded their benefit," Wofsy says. Fellow physician Langston agrees, saying, "I think there are some unreal expectations generated from advertising. Patients always put pressure on you to try something they may not totally understand." Wofsy say doctors in general are very strongly opposed to DTC marketing of new drugs, and Vioxx is a good example of why. "You have a chronic condition here—arthritis—that we can't cure," he says. "What we do for people is ameliorate their symptoms. We help them cope. You settle on a certain level of symptoms that the patient tolerates because pushing more aggressively to control them is more worrisome than the symptoms themselves. If a new agent comes along and is directly and aggressively marketed to patients, what's the physician to do? It becomes a tremendous pressure against sound medical judgement."
Hall wonders if Vioxx was overpromoted compared to what the alternatives are. While fingers are being pointed at pharma and FDA, he says, "There's a basic question about how we reimburse for drugs. Your insurance company reimburses you for prescription drugs—Nexium, Vioxx, what have you—while many over-the-counter drugs have to be paid for out of your own pocket. The patient really has no choice after a while." Another thing: "If you have a $3 billion to $4 billion drug and you're spending a quarter of a billion dollars on advertising, you've got to believe that it's being used beyond what the strict indications warrant," says Hall.
Will the Vioxx issue spur tighter regulation of DTC marketing? Says Morris: "The Democrats are interested in putting some limits on DTC. It does provide them with ammunition."
The Vioxx recall underscores the need to do better postmarketing surveillance of drugs, says Sandy Schwartz, MD, professor of medicine, health care management, and economics at the University of Pennsylvania School of Medicine. "We all recognize that initial clinical trials are not designed to pick up unanticipated side effects," he says. "Unanticipated side effects are just that—unanticipated. But statistically we know they're going to happen. And we don't have an adequate system in place to detect them."
Morris says pharmacovigilance was a hot area before Vioxx. "The FDA just last May came out with new guidance for good pharmacovigilance planning, for risk communication, for good premarket risk assessment," he says. "The recall will contribute toward that. I suspect there will be a round of politicking, finger pointing, and lawsuits. But major change? I doubt it."
Schwartz says, "We're looking at the risk-benefit of drugs—something the public doesn't understand and the lay press doesn't do a good job with. We're not talking about things that are good or bad. With all these drugs, it's a question of how good, in which patients, under what conditions. Every drug, if enough people take it in pharmacologic doses, is going to have some adverse events. The real question is whether the benefits of the drug are sufficient to significantly outweigh the risk. To the degree a drug is used in the highest-risk patients, then even its chance of doubling the risk of a cardiovascular event might be acceptable if the benefits are sufficiently high. However, to the degree it is used in people for whom the expected benefit is minimal—people who don't really need it—then even a very small risk is unacceptable. FDA—the staff and advisory committees—does an excellent job dealing with that. But it's not always appreciated by the general public. The public thinks a drug's either good or bad."
But, he adds, "There's a tendency to use some of these new drugs rather indiscriminately instead of targeting them to the people who would benefit the most. I don't think there's any question that overprescribing has been going on in this class of drugs. Drugs should be used where there's a significant benefit. We have to recognize there are always going to be unanticipated and unmeasured adverse events, what we call a Type 2 error. There's a chance you'll miss something because you're not looking for it. In this case, we were lucky it was found."