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Merck Says Justice Department, SEC Open Vioxx Probes (Update4)
Nov. 8 (Bloomberg) -- Merck & Co. said the Justice
Department and U.S. securities regulators opened inquiries
concerning the painkiller Vioxx, withdrawn because of
heart risks Sept. 30 in the biggest prescription-drug
recall ever.
The Justice Department demanded information about sales
and marketing practices related to Vioxx in connection
with a federal criminal health-care investigation,
Whitehouse Station, New Jersey- based Merck said in a
filing with the Securities and Exchange Commission. The
SEC is also conducting an informal probe concerning Vioxx,
Merck said.
The investigations come on top of the potential legal
liability Merck faces in the more than 300 lawsuits that
were filed by Oct. 15 on behalf of patients claiming harm
from Vioxx, according to an Oct. 21 Merck statement. A
Nov. 5 study in the U.K. medical journal Lancet said
scientific evidence was sufficient as early as four years
ago to suggest the drug should be withdrawn, and an
accompanying commentary said the U.S. Food and Drug
Administration should have acted.
``These developments will help define the standards drug
companies are expected to meet in addition to the
standards the FDA may or may not have,'' said Jerry Avorn,
a Harvard University drug-safety expert and the author of
``Powerful Medicines: The Benefits, Risks and Costs of
Prescription Drugs,'' in a telephone interview.
`Doing FDA's Work'
``The Department of Justice and SEC will be in a sense be
doing FDA's work at a time when the FDA has been asleep at
the switch in its regulatory function,'' Avorn said.
The FDA will evaluate how it addresses drug safety issues
and will complete drafting regulations about how
pharmaceutical companies should detect and address such
problems, the Wall Street Journal reported Nov. 5.
Government advisers at the U.S. Institute of Medicine will
also study how regulators address safety, especially for
drugs already on the market, the newspaper said.
Vioxx was found in a company-sponsored trial to double
patients' risk of heart attacks and strokes after 18
months of use. The painkiller may have contributed to
27,785 heart attacks and deaths from 1999 through 2003
because of the drug's effects on the cardiovascular
system, FDA researcher David Graham said in a separate
report Nov. 2.
Sales
Vioxx sales last year accounted for $2.5 billion, or 11
percent, of Merck's sales last year. Anita Larsen, a Merck
spokeswoman, didn't immediately return calls for comment
on the U.S investigations, and the company didn't
elaborate in the filing on the nature of the probes.
Shares of Merck, the second-biggest U.S. drugmaker, rose
36 cents, or 1.4 percent, to $26.57 as of 4:16 p.m. in New
York Stock Exchange composite trading. The shares have
dropped 41 percent since Sept. 29, the day before Chief
Executive Raymond Gilmartin announced the Vioxx recall.
Standard & Poor's Ratings Services said Nov. 1 it may
downgrade Merck's triple-A rating on corporate credit and
senior unsecured debt because of ``increasing concern
about the magnitude of possible litigation.''
Merck said Oct. 21 that it had about $630 million in
product liability insurance and hadn't established
reserves for Vioxx litigation.
To contact the reporter on this story:
John Lauerman in Boston at jlauerman@bloomberg.net.
To contact the editor responsible for this story:
Robert Simison at rsimison@bloomberg.net.
Last Updated: November 8, 2004 22:02 EST
http://www.bloomberg.com/apps/news?pid=email_us&refer=top_world_news&sid=a0Q6WfRksW78#
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