When it comes to billion dollar mistakes, Pharma and the big Wall Street firms are using the same playbook.
Like Merrill Lynch, Citigroup and Morgan Stanley, Merck wants to write off the cost of the estimated 140,000 people who had heart attacks on Vioxx--55,000 may have died--and move on.
Last week it announced it had reached a capped settlement of $4.85 billion that would allocate roughly $125,000 per plaintiff, less than it costs to treat a heart attack.
Merck's payout is less than the $10 or $20 billion predicted and, significantly less than Vioxx generated in profits before being withdrawn from the market in 2004.
So it wasn't a bad trade.
Merck doesn't want to dwell on the past anymore than the Wall Street firms who lost billions in bad bets last month--and sometimes their CEOs. Especially when the past includes hiding clinical evidence of Vioxx's dangers from the public so it could sell the popular pain reliever to twenty million people.
Like the abstruse new financial instruments behind this year's Wall Street wipeouts--collateralized debt obligations (CDOs) and special investment vehicles (SIVs)--few understand how Pharma's new drugs from COX-2 inhibitors to atypical antipsychotics and SSRIs work either--when they work.
So the new products have to be happy talked by paid analysts, researchers and young Turk salesmen. Doctors and experts who write journal articles about rigged studies and an FDA which, like Moody's and Standard and Poor's, is the last to know about problems that are its job to know.
Just as Wall Street doesn't portfolio a loan anymore--hello!--when it can be repackaged and sold to hedge funds, Pharma doesn't treat mental problems as transient or episodic anymore. It's called upselling.
Shy people are sick. Moody people are bipolar. The anxious need antidepressants and the depressed need antipsychotics. Children with slight behavior problems should be on major psychotropic drugs.
But of course to sell next-big-thing products you need urgency.
And nothing takes the one/two punch urgency out of a sales presentation quicker than phrases like "past performance is no guarantee of future performance," or "sizable losses may occur; please read prospectus."
Or "black box."
Not only does the black box threaten an upbeat pharmaceutical sales call--"Pay no attention to that warning behind the curtain Doc; it's just a formality"--it's inextricably connected to the larger risk of rushing a drug to market.
As long as Pharma wants to get its "patent worth" of a new drug's sales--and knows, like Merck, any resulting lawsuits will total less than the drug's profits--life-threatening drugs like Vioxx, Premarin, Ketex, Avandia, Zyprexa, Cymbalta, Seroquel, Risperdal and Paxil will be sold.
Worse, new "markets" will be opened for dangerous drugs like Risperdal--now approved for children as young as ten--and Zyprexa which causes diabetes and obesity and has approval pending for adolescent use.
The whole pharmaceutical industry is corrupt. Because of stringent FDA rules it takes billions of dollars to bring a drug to market, and even then it is not entirely risk-free.
I am aware of the danger of thalidomine; after all, I am a baby boomer. That is where the FDA has a valid concern - children. Libertarians normally opposed to government agree that the unborn child has rights and cannot choose for itself.
As an adult, I should have the right to take whatever medicine I choose. Our medical research would improve greatly if we had the freedom to participate without the federal bureaucracy.
I was angry at the Leftist hypocrites who favored strict FDA rules -until their own started dying of AIDS. Then these same people started complaining about not being able to test drugs.
by
Barker (0 articles, 0 quicklinks, 0 diaries, 120 comments)
on Monday, November 12, 2007 at 2:35:14 PM
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