Healthy Skepticism Library item: 14580

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Johnson LA.
Merck: More lawsuits, Justice probe over Vytorin
The Associated Press 2008 Nov 5
http://ap.google.com/article/ALeqM5hwq1GeRF8Fot1arbOE5cXE0j3i2AD948C1J81

Full text:

Lawsuits against Merck & Co. and partner Schering-Plough Corp. related to their marketing of cholesterol drug Vytorin are piling up, and the U.S. Department of Justice has begun investigating the drugmakers’ conduct, according to a regulatory filing.
The Justice Department’s Civil Division notified Merck in a Sept. 10 letter that the department is investigating whether the drugmakers’ promotion of Vytorin resulted in false claims to federal health care programs, Merck noted in a filing to the Securities and Exchange Commission late Monday. If so, federal health programs could seek to recover money they have spent on the drug.
A group of 35 state attorneys general are jointly investigating whether the partners violated state consumer protection laws in their marketing of Vytorin, Merck reported.
And, since January, Merck has been served with or become aware of about 140 civil class-action lawsuits alleging consumer fraud claims in connection with two cholesterol drugs sold and promoted by the partners’ joint venture. Some lawsuits allege personal injuries or seek medical monitoring for people who used the drugs, the filing said.
“We take this matter very seriously,” Skip Irvine, a spokesman for the joint venture, said Tuesday. “We’re cooperating with the request for information that the Justice Department is seeking.”
Merck also said in the SEC filing that it is cooperating with the other investigators.
Vytorin and one of its components, Zetia, have been blockbusters in the lucrative cholesterol market, with a combined $5.2 billion in 2007 revenue. But repeated bad news about the drugs this year has cut revenue by about 15 percent since last fall – they brought in only a combined $1.1 billion in the third quarter – contributing to new rounds of layoffs at both Merck and Schering-Plough.
In January, under pressure from congressional investigators, the companies released results of a long-delayed study showing that pricey Vytorin was no better at reducing plaque buildup than its second component, a generic cholesterol drug called Zocor costing about one-third as much.
That led to the investigations by congressional committees as to whether the companies deliberately delayed releasing the study’s results to boost sales of Vytorin and Zetia, a charge the companies have denied.
The investigations are being conducted by the Senate Finance Committee and the House Committee on Energy and Commerce’s Subcommittee on Oversight and Investigations. They have sought witness interviews, documents and information related to the companies’ promotion of Vytorin, the delayed release of results on the patient study, called ENHANCE, and stock sales by officers of the companies.
The Oversight and Investigations subcommittee also made requests on Aug. 21 and Sept. 2 for documents and information related to another patient study, called SEAS, that linked Vytorin to a possible increased risk of various cancers and showed it didn’t prevent deterioration, surgery or death in patients with diseased heart valves, as the companies had hoped.
“In a normal environment, this would not be a big deal,” analyst Steve Brozak of WBB Securities said of the Justice Department investigation. But pharmaceutical companies are getting lots of scrutiny these days, he said, and all the new litigation could distract the companies from their core business.
“It doesn’t mean anything today, but it can have a compounding effect that could mean something tomorrow,” he said.
Brozak said all the lawsuits by the class-action attorneys and state attorneys general are “a standard piling-on,” but the class-action lawyers are familiar with Merck’s successful defense strategy from litigation over its withdrawn painkiller Vioxx and are not likely to “make the same mistakes as they did with Vioxx,” he said.
Merck shares closed up almost 4 percent at $31.13, and Schering-Plough shares finished the day up almost 7 percent at $15.50 on a generally positive day on Wall Street.