Two weeks ago, a jury handed down the first verdict against Merck & Co. Inc. related to Vioxx, its painkiller pulled from the market in 2004 due to safety concerns. The award was a whopping $235.4 million to plaintiff Carol Ernst.

But what might be more alarming for drug makers than the amount is the attitude of the jurors.

Derrick Chizer, a juror in the case, told reporters that the award was a "message" to pharmaceutical firms.

"Respect us," he said.

Ernst herself called the verdict a "wake-up call" for big pharma, and she's right. It's been an especially rude awakening for Merck, which faces more than 4,000 cases related to Vioxx and its link to heart attacks. Whitehouse Station, N.J.-based Merck plans to appeal, but what kind of shape the company will be in when it all settles out is up for debate.

The disrespect jurors felt highlights just how much trouble the pharmaceutical industry is in. Once considered makers of life-saving and curative drugs, big pharma these days is seen as a collection of cutthroat businesses, ruthlessly chasing their bottom lines at the expense of public safety.

"This is an industry, which, quite frankly, has a poor reputation in the public's viewpoint," said Peter Claude, a partner at PricewaterhouseCoopers LLP.

PricewaterhouseCoopers, of New York, is putting together a series of reports on the public's impression of big pharma and the life sciences industry. Their first publication, "Recapturing the Vision: Integrity Driven Performance in the Pharmaceutical Industry," includes a graph by Harris Interactive Survey, which showed that in 1997, nearly 80 percent of people questioned about pharmaceutical companies thought they were doing a good job serving their customers. By 2004, that had fallen to slightly more than 40 percent, placing it well below computer hardware companies and car manufacturers. It still ranked above oil companies and the tobacco industry, though not by much - those industries hovered around 31 percent approval in 2004.

That is a forbidding drop, and Claude told BioWorld Today the reason is twofold.

First, there have been "a number of high-profile compliance issues" - recall ImClone Corp., of New York, as well as Merck's current quagmire - coupled with "prices continuing to go up, such that it has become a political issue."

"The industry is out there, saving lives and developing new products, but that is getting lost in all of the noise from its problems over the last couple of years, as well as the pricing and political focus," he said.

If the shaky assumption can be made that the worst is past, how can pharma change that public perception? Brian Riewerts, also partner at PWC, said the path out for pharma has to start from within each company and spread from there.

"It will be a sum of the parts," he said. "As each company begins to improve, each individual company will raise the overall" reputation of the industry. But he warned that "it's going to be a long haul - trust is easily lost and very difficult to regain."

Biotech Looking To Avoid Pharma's Trouble

The angry Merck jurors bring forth memories of the big tobacco verdict in 2000 - an award of $145 billion to members of a class-action suit. Jurors then were seething, too, over an industry that hid safety data in order to better sell its products. But Claude said the analogy between tobacco and pharma is wrong, no matter what the public thinks.

"It's an [incorrect] reference, because the issues surrounding tobacco have been known for years," and because smoking is a choice, he said. "With a pharmaceutical product, there's an assumption, and it's unfair, that everything taken is safe because it's been cleared by the FDA."

But that isn't the case - all drugs carry side effects, and when a drug is taken by hundreds of thousands of people, those side effects will show up. That doesn't mean the drug provided no benefit to everyone else, so "any betrayal the public might be thinking is totally unwarranted," Claude said.

Still, unwarranted or not, a big tobacco-like backlash is "likely to occur," if pharma doesn't publicly relate what good it provides, Riewerts told BioWorld Today.

So where does that leave biotech? After all, some of the most high-profile incidents in drug development belong to biotech's side of the equation - besides ImClone's Sam Waksal still sitting in prison for insider trading, there is Cambridge, Mass.-based Biogen Idec Inc.'s recent market withdrawal of Tysabri over safety concerns. But the innovation of biotech helps set it apart, Claude said.

"There is a difference for the products that have come out of the biotech industry," he said. "This is not a new hypertension product; this is a product that specifically targets a cancer gene or a virus. In those situations, you have much more tangible evidence of life being saved." Therefore, the public is willing to take on more risk due to the likely increase in its general health.

As biotechnology continues to mature, the complaints now aimed at pharma are probably coming its way, Claude warned. Today, Genentech Inc., of South San Francisco, is nearly a $100 billion company, in terms of market cap, while Merck has sunk to around $60 billion, and "as [biotech] entities grow, they become susceptible to the same pressures" as big pharma. If the government is sniffing the trail of pharmaceutical companies now, it "will soon turn its eye" toward biotech, Claude said.

"A lesson that the biotech industry can take away [from the Merck trial] is that a failure to communicate the value it provides and keep up that trust could quickly wipe away its positive image," he said. "And they should keep in mind how quickly pharma fell from grace."

No Comments