Opinion ID: 1211810
Heading Depth: 2
Heading Rank: 5

Heading: FDA Warning Letter (September 21, 2001)

Text: On September 21, 2001, the FDA posted on its website a warning letter that its Division of Drug Marketing, Advertising, and Communications (DDMAC) had sent to Merck four days earlier regarding its marketing and promotion of Vioxx. In the letter, the DDMAC stated that Merck's promotional activities and materials for the marketing of Vioxx were false, lacking in fair balance, or otherwise misleading in violation of the Federal Food, Drug, and Cosmetic Act (the Act) and applicable regulations. App. at 713. The letter explained: You have engaged in a promotional campaign for Vioxx that minimizes the potentially serious cardiovascular findings that were observed in the [VIGOR] study, and thus, misrepresents the safety profile for Vioxx. Specifically, your promotional campaign discounts the fact that in the VIGOR study, patients on Vioxx were observed to have a four to five fold increase in myocardial infarctions (MIs) compared to patients on the comparator non-steroidal anti-inflammatory drug (NSAID), Naprosyn (naproxen). Although the exact reason for the increased rate of MIs observed in the Vioxx treatment group is unknown, your promotional campaign selectively presents the following hypothetical explanation for the observed increase in MIs. You assert that Vioxx does not increase the risk of MIs and that the VIGOR finding is consistent with naproxen's ability to block platelet aggregation like aspirin. That is a possible explanation, but you fail to disclose that your explanation is hypothetical, has not been demonstrated by substantial evidence, and that there is another reasonable explanation, that Vioxx may have pro-thrombotic properties. App. at 713. The letter also directed Merck to issue Dear Healthcare provider letters to correct false or misleading impressions and information. App. at 719. The FDA warning letter received widespread coverage by the media and securities analysts. Although many media reports focused on the mere fact of the warning letter, [4] securities analysts tended to emphasize the impact the warning letter would likely have on the prospective Vioxx labeling changes (which were not forthcoming until April 2002), [5] Merck's ongoing promotional efforts, [6] and Merck's position in the market. [7] A report issued by UBS Warburg explained, [t]he FDA pointed out that there is no definitive study proving or disproving either conclusion [regarding the higher incidence of CV events associated with Vioxx in the VIGOR study]. ... The FDA's position appears similar to our own, which is that the data available to date are simply not definitive. App. at 2768. Nonetheless, securities analysts were of one voice in their projections for Merck and Vioxx; analysts from CIBC World Markets, Credit Suisse First Boston (CSFB), Dain Rauscher, Lehman Brothers, UBS Warburg, SG Cowen, and Morgan Stanley all maintained their ratings for Merck stock at buy or hold and/or continued to project increased future revenues for Vioxx. In the five days between September 20, 2001 and September 25, 2001, Merck's stock price declined by $4.16, or 6.6%, closing at $59.11 on September 25. Reuters reported this drop on September 25, explaining that [s]hares of Merck & Co. fell ... after U.S. regulators accused the firm of making unsubstantiated claims about its hot-selling arthritis drug Vioxx and downplaying a possible risk of heart attack from taking the medicine. App. at 2357. By October 1, 2001, however, Merck's stock price had rebounded to $64.66, $1.39 higher than its closing price before the warning letter was made public just over a week earlier.