Merck's Woes From Vytorin-Related Shareholder Suits
Merck & Co. and subsidiary Schering-Plough are facing more lawsuits relating to yet another one of the company's products, this time Vytorin. The manufacturers responsible for the contraceptive vaginal ring known as NuvaRing is already facing many lawsuits with claims from many women suffering from blood clots, such as deep vein thrombosis (DVT) and pulmonary embolism. The progestin desogestrel, known as a third-generation hormone, is released by the vaginal contraceptive and has been shown in studies conducted by independent researchers to increase the clot risk. Critics claim that Merck failed to highlight the true nature and possibility of such health risks in their marketing of the contraceptive device.
Now the pharmaceutical giant Merck & Co. is also facing serious criticism with regard to Vytorin which is used to treat high cholesterol. Treatment is based on the usage of two drugs - ezetimibe and simvastatin, which Vytorin claims prevents the creation and absorption of cholesterol. In recent years Vytorin's effectiveness has come under scrutiny with Merck acknowledging in 2008 that ENCHANCE trials showed that Vytorin versus simvastatin alone was no more effective. Yet, the company continued to market the expensive combination drug at three times the cost of simvastatin! Moreover, results of studies detailing such lack of effectiveness had been delayed by Merck. Also, Merck manipulated the timing of clinical end points, therefore raising concerns over the reliability of such testing and creating doubt over whether the results reflected the true nature and benefits of the drug.
Worries have arisen amongst consumers about Vytorin's possible cancer causing effect. A trial called Simvastatin and Ezetimibe in Aortice Stenosis (SEAS) showed that there was a higher level of cancer present in those who used Vytorin than those who did not. Other concerns of the FDA are that simvastatin may result in other health problems such as diabetes, memory loss, and liver issues. The drug is already related to myopathy which causes side effects such as pain, tenderness, weakness, and swelling.
With over twenty percent of Americans suffering from high cholesterol, the market for such a drug is very large. However, in perhaps the most alarming turn of all, executives in Merck have been seen to be selling off large amounts of stock, perhaps foreseeing the controversy about to erupt over their product and raising suspicions of insider trading. Various American State agencies have initiated investigations including the US Senate Finance Committee. Insider trading can cause a distorted view of a stock's value and deceive potential and existing investors.
Some shareholders' lawsuits have very recently been settled by Merck at a total payment of $688 million. The subject matter of such lawsuits included claims against Schering-Plough execs that failed to release results of the ENHANCE trials, artificially inflating the stock's price through insider trading, and engaged in misleading marketing.