Are the experts right? Or is this another example of the wisdom of crowds?Analysts are pooh-pooh’ing the Vytorin/Zetia affair. Tim Anderson of Sanford Bernstein wrote that ENHANCE will “likely only have a muted impact on Vytorin prescription trends given the limitations of the study, but some prescriber business may be lost on the margin contingent on much negative coverage ENHANCE continues to receive.” Catherine Arnold at Credit Suisse in a note on Friday talked about investors reactions as “excessive and disengaged from the fundamentals.”
So far, the market isn't listening. Merck’s stock was down last week 10%; Schering-Plough’s 23%.
Docs aren’t paying attention to the analysts either. Daily data from ImpactRx show steep declines in new scrips. Notes ImpactRx analyst Bob Caprara: if you look at 2-day averages, Vytorin has lost 75% of its new patient starts and was still trending down last Friday. If you continue to draw that line, Vytorin could easily lose 35% of its 2008 projected sales, he says.
Admittedly, Caprara notes, that’s a big if. Schering and Merck might be able to counter the negative press. Arnold argues that “there are no sound historical comparisons for a drug coming under this much fire for a disappointing efficacy study, especially when the study looked at an unvalidated surrogate endpoint, tested the drug against a strong active comparator and showed equivocal results.”
Maybe. Other drugs have faced a barrage of criticism and recovered – most notably, as Arnold points out, AstraZeneca’s Crestor. But we’d submit the Vytorin situation is no Crestor redux, and Crestor’s antagonist, FDA's internal gadfly David Graham, is no Steve Nissen (we blogged about one of Nissen’s attacks on the drug here). In the first place, Graham could point to no single trial to define his point. Vytorin’s critics now can. And that woefully-late-to-report trial looks to those with a suspicious caste of mind (including the New York Times editorial page and US legislators) like it was suppressed.
Then there’s the lower-is-better argument that the drug industry has used so effectively to boost one statin over the previous while driving sales in the category beyond the wildest dreams of its creators – first Merck, with Zocor over Bristol-Myers’ Pravachol, then Pfizer, with Lipitor over Zocor, then AZ with Crestor over Lipitor; and now Merck and Schering with Vytorin over Lipitor and Crestor. When you think about it, there ain’t all that much data comparing head-to-head outcomes data on the most powerful drugs – Vytorin’s IMPROVE-IT trial vs. Zocor won’t report out till at least 2010; the Crestor vs. Lipitor study not until 2011. And while Arnold is right that the ENHANCE study focused on a surrogate endpoint – atherosclerosis as measured by intima-media thickening – it’s an endpoint a lot closer to a real clinical endpoint than mere cholesterol reduction.
But whether Vytorin sales slump permanently or not, the real message is that primary-care risk is now off the charts, exacerbated by Big Pharma’s addiction to DTC advertising. In fact, we think the risk will bite a virtually permanent discount from the share price of firms whose earnings now or will flow largely from primary care products, particularly those – like Vytorin – which treat asymptomatic diseases.
There are several reasons why. First, with the general lack of head-to-head outcomes data – and understandably little appetite among Big Pharma for financing it pre-approval –payors will increasingly look to switch their insured populations towards generics. And this is particularly easy with asymptomatic conditions like hypercholesterolemia because patients have very little practical reason to care. Their disease doesn’t hurt; the drugs provide a merely theoretical benefit. At least diet and exercise make you look better.
Second, these drugs are the easiest ones to attack. There are no patient cholesterol or hypertension or diabetes lobbies that can compete with breast cancer or AIDS or Alzheimer’s. The makers of the big primary-care drugs are easy targets for politicians – and evidently more frequent targets, too (thanks in part to the backswing of the double-edged DTC sword Big Pharma has been wielding so aggressively). Merck and Schering will be asked to explain themselves to Congress (and no doubt FDA will be obliged to hold an advisory committee as well). That means more headlines and more questions. As we wrote here, it won’t help that the Energy & Commerce Committee, which is investigating Vytorin, is also investigating Pfizer’s Lipitor DTC campaign.
And you add those headlines to the fact that the drugs don’t actually make people feel better – and a compliance problem the drug industry has always struggled with will grow worse.
Let us return to Catherine Arnold’s point: “there are no sound historical comparisons for a drug coming under this much fire for a disappointing efficacy study.” Exactly. History -- the rear-view mirror -- isn’t where we should be looking to understand the meaning of the Vytorin story.
Photo 'Crowd listening to T.R. speak, Chicago' from Library of Congress, via Flickr
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