Drugs:
Merck's Health
Hinges on Sales
Of Arthritis Pill
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By Robert Langreth
Staff Reporter of The Wall Street Journal
WHITEHOUSE STATION, N.J. -- Merck & Co. has high hopes that a new pain and arthritis drug will be a corporate cure-all.
The medication, Vioxx, is part of a powerful new class of drugs known as cox-2 inhibitors, which aim to avoid the dangerous and sometimes deadly ulcers associated with existing anti-inflammatory medications. Merck is expected to receive government approval to market Vioxx within the next two months.
Merck needs Vioxx to be a winner. After years of rapid sales and profit growth, patents on some of its biggest sellers will soon expire, opening the door to less-expensive generic versions. The company is also grappling with a slowdown in sales growth of its big cholesterol-drug franchise and was recently hit with a delay in developing a new antidepressant.
Vioxx is already a step behind the competition in the huge, lucrative arthritis-relief market: Three months ago, Monsanto Co. and Pfizer Inc. jointly rolled out Celebrex, a cox-2 arthritis medication similar to Vioxx that has become one of the most successful new drugs in industry history. Still, Vioxx is believed to have some advantages over Celebrex, which is approved only for treating arthritis. Vioxx is likely to be approved for treating arthritis and acute pain, which would allow Merck to market the drug as a treatment for menstrual pain, dental pain and other uses.
Moreover, Celebrex can't be used by patients with allergies to certain antibacterial drugs, a problem Vioxx doesn't seem to have. Finally, according to Merck, Vioxx is a "true once-a-day pill." Vioxx's "major advantage over Celebrex is its duration of action," says Merck research chief Edward Scolnick. He says the company is conducting comparative studies to prove that a dose of Vioxx relieves arthritis symptoms for a longer period of time than a dose of Celebrex.
A spokeswoman for Monsanto says any implication that Celebrex is not a true once-a-day-pill is "inaccurate" because the drug "is fully effective for 24 hours." Monsanto also says it is exploring what additional tests are needed for Celebrex to recieve approval for treating pain.
Some industry analysts say there is room for two blockbuster drugs in the vast arthritis market. But others say Celebrex has taken off so fast with arthritis sufferers that there are comparatively few dissatisfied patients left for Vioxx to tap and thus it could be difficult for Merck to persuade recent Celebrex converts to switch to Vioxx.
Merck's recent record against Pfizer, one of the most aggressive marketers in the industry, is uneven. Merck stumbled in its last marketing campaign against Pfizer when it allowed Lipitor, marketed by Pfizer and Warner-Lambert Co., to become the dominant cholesterol drug in the U.S., even though its own Zocor had been introduced first.
The first critical test for Merck comes on Tuesday, when its application for approval of Vioxx is reviewed by a Food and Drug Administration advisory panel that will recommend whether to approve the drug for both pain and osteoarthritis, the most common form of arthritis. The full FDA is likely to reach a final decision by late May. Approval is expected.
Beyond giving the FDA panel data about pain relief and dosage, Merck will present safety studies. The data, Merck says, will prove that the incidence of small, early-stage ulcers in patients who took Vioxx is statistically equivalent to the incidence of small ulcers in patients who got a dummy pill.
Still, Merck officials concede, the FDA is likely to require that Vioxx's product label include some form of a standard warning -- of the sort found on Celebrex's label -- about the potential of anti-inflammatory drugs to cause bleeding ulcers. This requirement is expected to stand until longer-term human studies, under way at both Merck and Monsanto, conclusively prove that the cox-2 drugs cause fewer bleeding ulcers and other serious gastrointesti nal side effects than older drugs.
Meanwhile, Merck is girded for a marketing battle. The company has hired 700 new sales representatives to push Vioxx and other new drugs. And Raymond Gilmartin, Merck's chief executive officer, says the company has a large marketing budget for the product's launch, though he declines to say precisely how large.
Monsanto won't comment on how it plans to counter Merck's marketing efforts for Vioxx. But the company, based in St. Louis, is likely to play up the fact that Celebrex is approved for treating the most severe form of arthritis, rheumatoid arthritis, a use that Vioxx will not be able to promote initially. (Merck is conducting studies of Vioxx in treating rheumatoid arthritis.) Moreover, sales reps for Pfizer and Monsanto probably will argue there is no reason for doctors to take a chance on a new therapy when Celebrex has already worked so well on so many patients.
"It's going to be a dogfight," says William C. Steere, chairman and chief executive officer of Pfizer, which is based in New York. "We've been fortunate to have a head start," he says, adding, however, that Vioxx "is going to be a really good product . . . We're going to aggressively promote (Celebrex) against Vioxx."
Vioxx must also contend with competitors other than Celebrex. Johnson & Johnson is testing a cox-2 drug, and Boehringer Ingelheim GmbH could receive approval of its cox-2 drug, Mobic, as early as this fall.
"It will be very, very difficult" for Vioxx to penetrate the market, says industry analyst Hemant Shah. He predicts that Vioxx will capture 5% of the market for prescription anti-inflammatory drugs in its first year, only a small fraction of Celebrex's current share of almost 25%. "To be able to displace Celebrex, (Vioxx) needs to have some significant superiority" in its product label, such as a clearly enhanced safety profile, says Mr. Shah. "And it doesn't look like it will get it."
Whatever the future of Vioxx, some observers are suggesting that Merck can only weather its patent problems by acquiring another drug company. Mr. Gilmartin, however, says the company has no such plans. Merck will rely on its in-house scientists and research collaborations with biotechnology companies to produce breakthrough drugs, he says, and is counting on its existing medicines to sustain a respectable level of growth.
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