Pfizer and Merck: Different Strokes

Business Week discusses the difference between the two drugmakers reactions to safety issues surrounding Celebrex and Vioxx.

Cleveland Clinic's Top Heart Surgeon Profits from Criticizing Vioxx?

The Cleveland Plain Dealer follows a trail set out by David Blumenthal, director of Mass General's Institute for Health Policy. Eric Topol, one of the best heart docs in the world, if not the best, and long the face of innovation (and the most significant backer of bioethics) at Cleveland Clinic, has been researching Vioxx for three years:

Dr. Eric Topol, the Clinic's top heart doctor, published studies as early as 2001 warning that Vioxx and a similar drug, Celebrex, now made by Pfizer Inc., posed potential risks to some patients. The drugs, called cox-2 inhibitors, were instant hits when they came on the market in the late 1990s because they are easier on the stomach than aspirin and other painkillers.

The Plain Dealer - following details published in this week's Fortune magazing - describes Topol's subsequent hiring as biomedical advisor by a risky hedge fund called Great Point Partners LLC. (What is a hedge fund? It is what it does, which is "sell shares on the belief that they will lose value, then buy them back when they are cheaper.") What happened while Topol advised the hedge fund?

Fortune magazine reports in its Dec. 13 issue that Great Point bragged in a recent letter to investors that the hedge fund made a killing by "shorting" Merck stock -- that is, selling shares on the belief that they would lose value, then buying them back when they were cheaper. Since Merck pulled Vioxx off the market, the company's shares have dropped 37 percent.

Great Point said Topol's warnings about Vioxx were one reason the fund was on "the right side of that situation." But Topol took issue with the Fortune report, saying in a written statement that his views on Vioxx were well known long before he signed on with the hedge fund, that he did not know the fund was trading Merck stock, and that he had no personal investment in the fund.

Topol wrote to Fortune refuting this and other accusations of conflict of interest made the magazine:

Topol took issue with the Fortune report, saying in a written statement that his views on Vioxx were well known long before he signed on with the hedge fund, that he did not know the fund was trading Merck stock, and that he had no personal investment in the fund. Topol said he quit the advisory board in October "because of the concern about an appearance of a conflict of interest, even though there was none." He said Great Point was paying him $12,000 a year to evaluate new technologies for treating heart disease.

Blumenthal stops short of describing Topol's activities as conflicted, and predicts more expert-as-investment-advisor behavior in the future. There's no indication in the stories that Merck revealed Topol's role, and Certainly Fortune could have dredged it up from the fund's press release, but you have to wonder how many people are going to step up to advise companies on matters of profits when the backlash can be this strong.

If Eric Topol in fact earned $12,000 for advising a little hedge-fund company about the state of biomedical technology, including his view about Merck, which was already well published, one would be hard-pressed to accuse him of trying to profit. Topol could have made a small fortune hedging Merck himself, in someone else's name to cover his tracks. Would he really be stupid enough to take a tiny fee instead, in full public view? Unless there is much more to this story than is reported, it looks like a fancy way to tar the biggest critic of a certain pharmaceutical company... (Wait, should I have written that? Maybe a Philadelphia Inquirer writer will 'discover' that I own a retirement mutual fund with $14 worth of Merck stock in it...) - GM

Merck and Ethics

Raymond Gilmartin, CEO of Merck, spoke at Michigan. Gilmartin took the occasion to defend the timing of his company's decisions about Vioxx.

He said that although some Merck insiders urged him to inform the FDA of the findings and keep Vioxx on the market, he acted decisively, withdrawing the drug within a week.

The Merck CEO reserved his most enthusiastic comments for his corporate bioethics efforts:

After taking the reins in 1994, Gilmartin said within a year he had established the company’s first ethics office. He said Merck had established numerous ethics systems during his tenure — including a confidential phone number employees can call for advice concerning their ethical dilemmas.

Merck’s commitment to ethical behavior goes beyond complying with U.S. and international laws, he said. “As Plato put it, good people do not need laws to tell them how to behave responsibly; bad people always find a way around the laws.”

Gilmartin said Merck’s code of ethics is displayed in 25 different languages at company headquarters in Trenton, New Jersey. “Over time, ethical behavior turns into a competitive advantage,” he said.

Merck's CEO did well by Michigan business students: "The capacity audience, mostly Business School students, treated Gilmartin to a loud and spirited ovation after he concluded remarks."

Did the FDA Work Against Revealing Vioxx Findings?

Washington Post quotes an FDA official, David Graham, who indicates that in fact he was told to "water down" the report on the hazards of Vioxx.

The Great Pharma Market Collapse

Merck lost 27% in a day on news about Vioxx after holding out on the matter for some time. It will be interesting to follow how the issue is spun in the marketplace, specifically whether these lapses are characterized by either bioethicists or market analysts as a failure either of the health system or of organizational bioethics.