Vioxx Faces Challenges from Insurers, Lawyers

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August 26, 2004

By Kim Dixon and Ransdell Pierson

CHICAGO/NEW YORK (Reuters) - Merck & Co. faces a dual threat from health

insurers and patients' lawyers, after a U.S. study suggested its Vioxx

arthritis drug carries a greater risk [of heart attacks] than rival

medicines.

Health insurers on Thursday said they may further restrict payments for the

drug, and attorneys already involved in product-liability lawsuits against

Merck said the findings would bolster their cases.

The study, financed by the U.S. Food and Drug Administration and released

Wednesday, is the latest to link Vioxx to heart attacks. That news pushed

Merck shares down 2 percent.

Aetna Inc., one of the biggest health insurers, may cast more doubt on Vioxx

and similar drugs, when it releases data from a similar analysis within

weeks, the company said. The company is submitting its study to a medical

journal for review by other doctors.

The FDA and Aetna reviews follow a widely publicized article in 2001 that

found the entire class of painkillers known as -2 inhibitors, which

include Vioxx and Pfizer Inc's Celebrex, might cause blood clots that

trigger heart attack and stroke.

The -2 drugs are designed to fight inflammation and pain while reducing

the risk of ulcers caused by over-the-counter pain medication, such as

aspirin and ibuprofen.

Many big health insurers such as WellPoint Health Networks Inc. and Cigna

Corp. already make it difficult to get Vioxx because of the safety issues,

by requiring a doctor to get special permission from the HMO for a

prescription.

The new FDA study looked at medical records of 1.4 million people insured by

Oakland, California-based Kaiser Permanente.

Kaiser will reconsider its coverage in light of the new information, a

spokeswoman said. Other HMOs said they will likely follow suit.

" The folks on my team will review it, " said Mark Rubino, chief pharmacy

officer at Aetna, one of the biggest U.S. health plans. " What we like to

look at is real life and Kaiser has done that. "

" We already have it on the agenda for our November pharmacy meeting -- to

talk about Vioxx and other -2 inhibitors, " said Deborah Bohren, a

spokeswoman for Wellchoice Inc., the biggest health plan in New York with 5

million members.

Vioxx remains one of Merck's biggest products, with global revenue last year

of $2.55 billion, but sales have been flat in recent years amid lingering

safety concerns. The new studies could fuel product-liability lawsuits

against Merck.

" We'll be able to tell a judge this trial showing heart attack risk was

conducted by the FDA, which will carry a lot of weight, " said Jerrold

, a partner at the Long Island-based law firm of & Waichman.

said his firm has already filed suits alleging Vioxx caused his

clients heart attacks and strokes.

Chicago attorney Moll, who predicted the FDA trial would bolster his

cases, said although Vioxx likely increases the risk of heart attack, the

actual number of such attacks is probably quite low. " So Merck won't be

facing thousands of lawsuits -- probably just scores or hundreds, " Moll

said.

In the FDA study, patients taking the most common doses of Vioxx had a 50

percent greater incidence of heart attacks and sudden cardiac death than

those taking any dose of Celebrex.

Merck on Thursday said it " strongly disagrees " with conclusions of the

trial, criticizing the fact that it looks at data in retrospect, which some

consider less reliable than studies in which patients are enrolled ahead of

time and specific goals are set.

Cigna, with 10 million members, will only cover Vioxx for people who cannot

tolerate standard non-steroidal anti-inflammatory drugs, such as ibuprofen,

according to Shearer, a Cigna spokeswoman.

" We'll be looking to the FDA for guidance " on how to deal with the new data,

she said.

Merck shares fell 97 cents, or 2.1 percent, to close at $45.05 on the New

York Stock Exchange.

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