“Marketing Without Innovation”: a Merck Story

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File this under ‘what were they thinking?’ In a puzzling move that has drawn considerable skepticism, the FDA late last week approved a new combination cholesterol pill from Merck (MRK). But instead of delivering a much-needed medicine to people who may be at risk of heart attacks and strokes, the endorsement instead has raised questions about regulatory judgment and marketing motives.

Why? The FDA approved Liptruzet, which is a combination of Zetia and atorvastatin, which is the active ingredient in Lipitor – the Pfizer (PFE) drug that is now widely available as a generic. However, Merck already sells Vytorin, which combines Zetia with its own Zocor, which is also now sold as a generic. Moreover, Vytorin has a decidedly checkered history.

Merck – along with competitors Pfizer (PFE), GlaxoSmithKline (GSK), AstraZeneca (AZN), Bristol-Myers Squibb (BMY) and Eli Lilly (LLY) – is suffering through declining sales as once-blockbuster drugs lose patent protection and company labs fail to produce enough new medicines.

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MRK Revenue TTM Chart

For those who may not recall, a boondoggle of a study called the Enhance trial, which was released in 2008 and designed to greatly bolster Vytorin in the marketplace. Instead, the study found the combination drug could, indeed, lower LDL cholesterol, but failed to show a benefit over Zocor in reducing plaque in the carotid artery and showed a statistically insignificant build up.

There was another reason the trial became an albatross for Merck. Along with Schering-Plough, which was its partner at the time in this effort, but was later acquired, Merck changed the primary endpoints, failed to include the lead investigator in the decision and stalled at naming members of an allegedly independent panel to review the data. All of this came to light amid ongoing delays in releasing the trial (see earlier Pharma news).

The entire episode, which further sullied Merck’s reputation, raised questions about whether Vytorin patients received sufficient benefit for a heavily promoted and expensive pill. In hopes of proving Vytorin does have value and boost its stalled cardiovascular franchise, Merck has been running the 18,000 patient Improve-It trial, but results are not due until September 2014 (reported in prior Pharma news).

This prompts a question – what happens if the results are unfavorable? Well, Merck is left with a pair of cholesterol pills generating flat to declining revenue. Even if the Improve-It trial results are favorable, the drugmaker faces a different dilemma, because the Vytorin patent expires in 2017. By winning approval for Liptruzet, Merck has found a way to overcome the odds.

This is where the skepticism and cynicism kicks in. In its announcement, Merck acknowledged that Lipruzet did not offer any “incremental benefit on cardiovascular morbidity and mortality over and above that demonstrated for atorvastatin.” In other words, patients and physicians should not expect the combination pill to offer any advantage in reducing the chance of developing heart disease.

As Josh Bloom of the American Council for Science and Health noted this week, this is really about marketing, not science or advancing patient health: “Merck is trying something that is as good an example of marketing without innovation as you’ll ever see… Why on earth would we need a virtually exact copy of a drug that doesn’t even work?”

Wall Street, meanwhile, viewed this development as a plus. In an investor note, Sanford Bernstein analyst Tim Anderson posited that the FDA would not have approved Lipruzet if there was a hint that the Improve-It trial was showing any concerning signs. “If FDA were worried about the harm scenario, would it approve Liptruzet like it just did? Probably not,” he wrote.

To read the remainder of this article, go to Pharmalot.

Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at editor@ycharts.com.


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