Technology

A Bitter Pill for Merck's Vioxx


By Amy Barrett The battle of Big Pharma's titans -- Pfizer (PFE) and Merck (MRK) -- grows more intense by the day. On Aug. 25, a study funded by the Food & Drug Administration linked Merck's painkiller Vioxx, one of the so-called Cox 2 inhibitor drugs, to a higher risk of heart attack and sudden cardiac death than rival Pfizer's Celebrex. While Merck disputed the finding's validitys, the study could give more ammunition to Pfizer's sales reps as they battle for share in the intensely competitive market.

The report comes as more bad news for Merck, with $23 billion in annual sales. It's bracing for patent expirations on some key drugs in the next few years, and analysts complain of a weak pipeline for promising new ones. With $2.5 billion in annual sales, Vioxx has claimed blockbuster status, but it hasn't lived up to Wall Street's expectations.

Concerns over its potential cardiac side effects have swirled for years, so these latest findings put even more pressure on Merck to make its new cholesterol-lowering drug, Vytorin, a megahit. That drug, which is marketed with Schering-Plough (SGP) through a joint venture, is going up against the biggest-selling drug in the world, Pfizer's $10 billion juggernaut Lipitor.

BACKWARD LOOKING. The recent Vioxx side-effects study, based on an examination of medical records for 1.4 million people insured by Kaiser Permanente, isn't by any means conclusive. And while it did indicate a higher cardiovascular risk for Vioxx, Merck argues that such a study can be misleading because it doesn't show if those taking Vioxx had higher cardiac risk factors to begin with.

Several years ago, similar backward-looking studies showed a cardiovascular benefit for women taking hormone-replacement therapy. Yet a more recent government-financed trial involving those drugs showed that the opposite was true.

The problem for Merck, however, is that physicians are already spooked about Vioxx's possible cardiovascular side effects. And Pfizer's potent marketing machine may be able to stoke those fears, based on this recent data. That could continue the erosion of Merck's market share in the Cox 2 field, which has slipped from 50% in early 2002 to 35% in May, 2004.

PATENT PAIN. With questions still surrounding Vioxx, Merck is pinning its hopes on Vytorin, a combination of two existing drugs -- the blockbuster Zocor and a cholesterol-cutting drug from Schering-Plough called Zetia. SG Cowen analyst Stephen M. Scala believes Vytorin could reach sales of $2.5 billion in 2008. Problem is, Merck has to share that with partner Schering. And Merck also will take a big hit in 2006 when its $5 billion Zocor loses U.S. patent protection.

Looks like Merck will need more than a strong painkiller to solve its current headaches. Barrett is BusinessWeek's Philadelphia bureau chief


Race, Class, and the Future of Ferguson
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus