Bayer's Big Drug Boo-Boo

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During my search for interesting articles I came across this Brian Lawler's post.

Many people make mistakes. So do pharmaceutical companies. There can be a huge difference between thesethough.

The perception that a pharmaceutical company is withholding information or acting nefariously can be extremely damaging, as it can erode confidence and trust in the whole industry.

By Brian Lawler, 16 Oct 06

The perception that a pharmaceutical company is withholding information or acting nefariously can be extremely damaging, as it can erode confidence and trust in the whole industry. The best example of this phenomenon occurred with Merck's Vioxx. Now, Merck has been inundated with more than 14,000 lawsuits related to the drug's use, and a perfectly good drug is completely off the market.

Last month, German conglomerate Bayer (NYSE: BAY) revealed that it had forgotten to submit information to an FDA advisory panel convened to discuss the safety and efficacy of the company's drug, Trasylol, which is used to reduce blood loss during heart surgery.

After this advisory panel meeting, an independent researcher noticed that conspicuously missing from Bayer's meeting with the FDA was a study examining hospital records of the drug's use. That study showed Trasylol to be associated with several negative safety issues, like an increased risk of death. Oops!

Fortunately, only a couple of days after being notified (or reminded) by the researcher of the omission from the FDA meeting, Bayer made a public announcement apologizing for the mistake.

This Friday, Bayer announced that it was conducting its own investigation into why the study did not get released before the advisory panel meeting, and that it was suspending the two individuals responsible for the error.

It's especially ridiculous for Bayer's employees to have failed to release the negative results of this retrospective study, considering that sales of Trasylol have already been on a steep decline. Sales were down 38% year over year, to $44 million, in the most recent quarter, and down 26% to $94 million in the first half of 2006.

Trasylol is not an integral component of Bayer's pharmaceutical sales, either. It only accounted for roughly 3% of the company's $3 billion in drug sales in the first two quarters of the year. So this makes the omission of the safety information all the more befuddling.

The worst that could have come out of the advisory panel meeting regarding Trasylol would most likely have been a stricter label for the drug. Now that Bayer has brought all this extra scrutiny on the drug, not to mention exposed itself to lawsuits, the situation could get worse, depending upon what the company's internal investigation brings to light. More important, though, than the potential loss of revenues from Trasylol is Bayer's loss of reputation from this whole mess, because it makes it that much harder for doctors to trust the company's trial results and the words of its sales representatives.

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