A Painful Mistake

In a world in which the fortune OF a pharmaceutical company can rise and fall on the strength of a handful of blockbuster drugs, Vioxx was a giant. Unveiled with great fanfare by Merck in 1999, it was part of a group of prescription medicines called COX-2 inhibitors that were supposed to be safer for treating arthritis pain than over-the-counter remedies like aspirin, ibuprofen and naproxen. Thanks to an aggressive, multimillion-dollar marketing campaign, more than 20 million Americans took Vioxx at least once. The drug racked up $2.5 billion in worldwide sales last year and accounted for 11% of Merck's revenue.

So it wasn't just big news when Merck announced last week that it was pulling Vioxx off the market; it was a bombshell that rocked financial markets and set doctors' phones ringing. A few days earlier, an independent panel had concluded that taking the drug for more than 18 months doubled the risk of suffering a heart attack or stroke. Merck had a choice: it could beef up its warning labels, or it could bite the bullet and pull its blockbuster off the market. Given the legal risks of selling a drug known to cause heart problems, Merck probably did the right thing.

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The reaction on Wall Street was swift and brutal. Merck's chief executive Ray Gilmartin announced that the company's 2004 earnings could shrink as much as 20%. Its stock promptly lost $28 billion of its market value, temporarily dragging the Dow Jones industrial average down with it. The timing could not have been worse for Merck, whose sales last year grew a paltry 5%, compared with 23% in 2000, and whose big anticholesterol drug Zocor will lose patent protection in 2006, with nothing to replace it. Some analysts wondered whether the company was ripe for a merger — an idea Merck executives have steadfastly rejected. "Without a deal, Merck cannot grow," says Richard Evans, a senior analyst with Sanford C. Bernstein & Co. "In fact it may get smaller."

Worried patients peppered doctors and other health-care providers with questions of their own. Should they stop taking Vioxx right away? How long could they expect its side effects to persist? Was there another drug they could take instead? Most doctors rushed to reassure. "This is a serious issue and should be dealt with seriously," says Dr. David Wofsy, president of the American College of Rheumatology. "But for the vast majority of people who are on Vioxx or who have ever been on Vioxx, there is no harm." (More on that in a bit.)

The recall also raised long-simmering doubts about the benefits of the whole class of COX-2 inhibitors. These so-called designer drugs, which include Celebrex and a newer drug called Bextra, were supposed to offer the pain-killing power of aspirin without the damage to the stomach lining. But they were a lot more expensive than over-the-counter pain-killers (prescriptions cost as much as $2 to $3 a day), and many doctors felt the drugs were being hyped far beyond their medical value. "These agents have been the subject of absolutely intensive, unrelenting marketing," Wofsy says. Even if you don't have arthritis, you can probably hum the Celebrex jingle or Vioxx's It's a Beautiful Morning theme.

So far, none of the other COX-2 inhibitors have been tarred with Vioxx's brush. Pfizer's Celebrex has been studied the longest; some patients in three ongoing Celebrex trials have been followed for several years without any signs of cardiovascular effects. Bextra, also from Pfizer, hasn't been tested as long, but so far the data look good. Two more COX-2 inhibitors, Arcoxia (from Merck) and Prexige (from Novartis), are awaiting FDA approval. "Obviously, we now have to look more carefully at the other members of the class," says Dr. Steven Nissen, a cardiologist at the Cleveland Clinic who voiced his concerns about Vioxx several years ago.