Of mice and men ...

On March 4, 2009, the U.S. Supreme Court issued a 6-3 majority decision in Wyeth v. Levine, No. 06-1249 against the pharmaceutical giant. The Court held that the Food and Drug Administration's (FDA) prescription drug labeling judgments, and specifically, its approval of the label for Wyeth's Phenergan, do not preempt state law tort claims alleging inadequate warning. At issue was a lawsuit by Vermont guitarist Diana Levine, who lost an arm to gangrene after Wyeth’s antinausea drug Phenergan was INADVERTENLTY injected into one of her arteries during a push IV injection. Ms. Levine had gone to a clinic for treatment of a migraine headache. Ms. Levine argued that Phenergan’s labeling, though approved by the Food and Drug Administration, didn’t provide proper warnings of the risk of administering the drug through a push IV injection instead of using an IV-drip.

For those following the case over the past few months, it was evident that heads would turn regardless who the court ruled in favour of. But few were expecting the decision to go against Wyeth, especially since the courts had ruled in favour of pre-emption in a similar case involving a medical device (see Riegel vs Medtronic). Ultimately, what it came down to was the presence of explicit wording in the Medical Devices Act saying “no State ‘may establish or continue in effect with respect to a device . . . any requirement’ relating to safety or effectiveness that is different from, or in addition to, federal requirements …”. Nothing of that sort is present in the Food, Drugs, and Cosmetics Act. So why did Wyeth’s legal team even consider pre-emption to be a plausible defense? Apparently the FDA was in the mood for an ol fashioned power trip in a preamble to a 2006 regulation the agency issued on prescription drug labeling. This included statements that the agency can indeed pre-empt state law as they provided for not only a floor but also a ceiling to such labeling language, and so on. Wyeth seems to have relied a bit too heavily on this preamble. So this decision might look like a whack at the drug industry, but it's actually a case of a federal agency being told that its powers aren't as broad as it occasionally seems to think. You wouldn't necessarily guess it to see that way the justices lined up in this case, but the verdict looks like a real endorsement of federalism. And in the same way, you might not guess it, but the drug companies would probably like for the FDA to be that powerful, actually - that way, some of the responsibility could be offloaded, and there would be a single place to go for regulatory clarity.

Of equal importance and worth mentioning is that this unfortunate incident could easily have been avoided but for the EMT’s negligence in administering the drug in a way the manufacturer did not intend. This litigious society is going down the toilet. Obviously, Ms Levine should be compensated, but by those who made the mistake, not by those who provided the cure, that when administered properly would have helped her, not harmed. I cannot help but think the main reason they went after Wyeth is because Wyeth is seen as the party with the deepest pockets. This is not to say that Wyeth was completely devoid of fault. The bigger issue is clearly whether or not it is pharma’s responsibility to provide adequate warnings in conflict with FDA approval. As it stands, and regardless of what the FDA says, the burden of proof is not on the FDA to prove harm, but rather on the manufacturer to prove its product is safe. The FDA warning requirements provide a “basement not a ceiling” - e.g., the manufacturer has some responsibility to update its labels and warnings over time, when more evidence is obtained as to the safety or danger of its products.

Preemption has a place but not in this case and not with these facts. That Wyeth could have requested a label change to reflect its growing awareness of possible heightened risk from certain routes of administration is incontrovertible. That Wyeth claimed that it could not have done so flies in the face of reason and past experience. None of this suggests, however, that a good case cannot be made for preemption. This just wasn’t that case. The facts were not on Wyeth’s side. All this is simply to suggest that I don’t think this is the last we’ll hear of preemption or the last the Supreme Court will have to say on the doctrine.

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Pfizer-Wyeth: Why nobody wins

In an otherwise headline sluggish industry (lawsuits apart), the Pfizer-Wyeth deal certainly has lit up the newswires and sparked some much needed debate. The announcement of the $68 billion dollar deal was as much of a shock to some as it was the culmination of months of predictions for others in the industry. The merger is being touted as an “ideal marriage”, with the potential to save billions for both companies, as their most profitable products face patent expiration from 2011 onwards. They may have others buying into this hogwash, but I see this deal for being what it actually is – Twisted. The formation of Pfyeth benefits nobody- not the stockholders, not the employees, not consumer sentiment, definitely not drug development, and even misles the common tax-payer! Actually that is not completely true. It does benefit one person – Pfizer CEO Jeffrey Kindler. Kindler played his cards well and the announcement formed a welcome distraction from the news that Pfizer was also paying a $2.3 billion settlement to make the Department of Justice stop investigating the company’s illegal promotion of discontinued Cox-2 painkiller Bextra, and a 90% drop in income.

Kindler: "We're in a much better position to bring on board the scientists and programs and projects that Wyeth has"
The last couple of times Pfizer went appliance shopping, buying Warner –Lambert in 2000 and swallowing Pharmacia-Upjohn in 2003, it was faced with serious alignment and integration issues. Pfizer's "big corporation" image was at definite odds against Warner’s consumer health focus and there was a serious culture clash that was eventually only solved by new management. While corporate image may not be the issue at hand in this case, Pfizer thinks they can swiftly integrate an entirely new field of therapeutics! Wyeth alone with its expertise in biologics barely made it past facility inspections and product safety audits. One can only imagine the tensions in the hallways as Pfizer deploys its managers to oversee and “align” operations. Kindler mentions bringing aboard scientists, programs, and projects, he will also be bringing aboard the many lawsuits against Wyeth for the Hormone Replacement Therapy debacle.

Kindler: "In one single transaction, the combination with Wyeth advances every single one of (our) strategies,"
Really? Like the halving of stock dividend? Probably the only reason investors would consider having Pfizer stock in their nest egg post Lipitor. What about manufacturing capacity? Oh that’s right, you are shutting down 5 plants. Or maybe you are referring to sales? Together, the two companies will have 17 products with annual sales of $70 billion or more. Reasonable, but that’s only until 2012. This purchase is not transformational and as much as Pfizer would like to think that this will solve their pipeline problems, it is simply not acquiring a robust R&D model. As Derek Lowe of In the Pipeline fame says “as a research-driven company grows larger, everything scales except research productivity”.

Behind the Scenes
Despite all the above grievances with respect to this merger, there is one poorly publicized issue that troubles me the most. The deal is being financed by five banks: Bank of America Merrill Lynch, Barclays, Citigroup, Goldman Sachs and J.P. Morgan Chase. The billions that will be lent to Pfizer are coming from the Troubled Asset Relief Program (TARP) program- set up by the US government to purchase assets and equity from financial institutions in order to strengthen the financial sector. It is the largest component of the government's measures in 2008 to address the subprime financial crisis. That’s right. The money for this deal is coming from the American taxpayer! The money that will eventually be used to eliminate 20,000 jobs! So not only does Pfizer jip you on meds, but they take your money and punish you for helping? How is this right? Although meant to increase lending by banks, the only restrictions set on TARP money are that participating banks can't increase their dividends without Treasury's approval and must agree to certain limits on executive compensation. Few other strings are attached.

I am however hopeful. Hopeful that the Obama administration takes some steps in ensuring public rescue funds are used ethically, that the FTC investigates this deal closely, that Wyeth shareholders vote against this offer, and that the creation of Pfyeth does not send the industry into a desperate feeding frenzy.

UPDATE:
Pfizer currently has six Alzheimer drugs under development and one on the market, while Wyeth has four of Elan’s Alzheimer drugs and five Alzheimer drugs of its own in development. Pfizer will now control 16 Alzheimer drugs, which represents a majority of all Alzheimer drugs currently in clinical development and on the market, creating a virtual monopoly for itself.

If allowed to control all these drugs, Pfizer would undoubtedly be forced to determine which of these compounds would receive priority in clinical development and which would be slowed down. As a result, Pfizer will likely favor those drugs in which it holds a 100% interest. Ultimately, the biggest loser in this situation would be Alzheimer patients, along with their caregivers and physicians, who may have fewer treatment options available to them.

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