Merck's "voluntary" withdrawal of Vioxx from the market will likely have strong repercussions throughout the pharmaceutical industry. Of course it has affected Merck the most, including the loss of $2.5 billion in annual sales -- about 11% of the company's total sales in 2003 -- and loss of 26.2% of shareholder value.
In case you don't know the story, Vioxx was withdrawn after one of Merck's own studies showed an increased risk of strokes and heart attacks seen in patients after three years on the drug.
The withdrawal raised many questions, including FDA's safety review process, coziness between FDA and drug companies, the length of time it took Merck to pull the drug, and even concern about the role of DTC ads.
But let's just talk about the effect on other COX-II inhibitor drugs, including Celebrex and Bextra.
Some people have suggested that the fall of Vioxx will help its competitors. After all, patients taking Vioxx will have to be switched to one or the other of these drugs. Maybe. Or maybe it will help OTC products like Advil, ads for which mention the Vioxx problem.
But perhaps the most troublesome effect may be the increased scrutiny that will now be paid to other COX-II inhibitors and the likelihood that they too will be shown to have similar problems.
The FDA has already said it will require longer-term studies for similar ("me too") drugs that are waiting for approval (e.g., Merck's arthritis drug Arcoxia and Novartis' drug Prexige) as well as drugs already on the market (i.e., Celebrex and Bextra). This is what I call a manifestation of the "Me-Too Domino Effect," a term I just invented.
A "me-too" drug is a chemical entity that is structurally very similar to an already known drug and having only minor pharmacological differences. According to Marcia Angell, former editor of the New England Journal of Medicine and author of the book "The Truth About the Drug Companies," "about 25 to 30 percent of [pharmaceutical company] sales goes to marketing [me-too drugs]."
An axiom of the Me-Too Drug Domino Effect is that if there is a problem with a drug that has "me-too" competitors, the competitors are also at risk. Need proof? On October 15 Pfizer announced that Bextra was also associated with an increase in heart attacks and strokes. Seemingly in denial of the axiom, Pfizer-according to the Wall Street Journal-plans to sponsor a clinical trial to test Celebrex's ability to prevent heart attacks and strokes in patients with serious cardiovascular disease. Go figure!
The Me-Too Drug Domino Effect can also work in favor of drugs that benefit by association with good news about a competing drug. Another axiom of the Me-Too Drug Domino Effect, however, is that the upside potential is much less than the downside potential. In my view, Pfizer is gambling against the odds.