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Warning: Not All Boxed Warnings Are Equal

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Boxed warnings on a drug's label don't carry skulls and crossbones, but they can sometimes be a death sentence in the revenue department. The Food and Drug Administration reserves the box for only the most severe warnings, which are often life-threatening side effects.

So it came as a bit of a surprise to me when the FDA slapped a black-boxed warning on Bristol-Myers Squibb (NYSE: BMY  ) and sanofi-aventis' (NYSE: SNY  ) Plavix on Friday. The availability of a genetic test to see if the patient will respond to Plavix has been noted on the label since last May, but the agency decided to highlight the warning. I guess "not working" on some people is a side effect, but it's not at the same level as Biogen Idec (Nasdaq: BIIB  ) and Elan's (NYSE: ELN  ) Tysabri causing a potentially fatal brain infection, for instance.

How much will the boxed warning hurt sales? In theory, not at all since the availability to test was already on the label. In reality, there were doctors not ordering the test; that's the reason the FDA wanted the availability highlighted. If doctors increase their usage, some additional patients screened for the genetic variation won't end up taking the drug. The genetic difference occurs in 2% to 14% of individuals depending on their racial background.

Another issue for Bristol and Sanofi is that drugs with boxed warnings have stricter advertising requirements, including a ban on reminder ads, which contain the name of the drug, but don't say what it does.

So who's poised to pick up those patients that can't benefit from Plavix? Eli Lilly's (NYSE: LLY  ) Effient was approved last year, but the drug hasn't gained much traction with sales of just $27 million since its launch last year. AstraZeneca (NYSE: AZN  ) also has a blood thinner, Brilinta, which is up for review with the FDA.

Bristol and Sanofi are trying to milk as much out of Plavix as they can before it goes off patent in a few years. This new boxed warning may slow the stream just a bit, but with a bucket as full as it is ($6 billion and counting), the new warning shouldn't be too hard to deal with.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Elan is a Motley Fool Rule Breakers choice. The Fool has a disclosure policy.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 15, 2010, at 2:23 PM, TMFKris wrote:

    How interesting that the FDA would do something to help patients (alert them to a drug that might be ineffective because of their genetic makeup), at the expense of drug companies (who would lose money.)

    Kris (TMF copyeditor)

  • Report this Comment On March 15, 2010, at 6:06 PM, KateSeattle wrote:

    I find this article lacking in insight. Plavix could, in effect, be deadly for a person who has been prescribed the medication if it doesn't work. I imagine someone who is taking it, forms a clot and dies from the resulting cardiac incident would have preferred that black box warning. You make it sound like some over the counter heart burn medication. Bummer that the tums didn't work.

    In contrast, Tysabri has issues in people who take a variety of immunosuppresents, as many MS patients do. Having a black box warning on both allows patients and doctors to make the best health care decision for the individual situation.

    The issue here is informed choice. Empowering doctors and patients is good, even if it happens to inconvenience investors.

  • Report this Comment On March 16, 2010, at 9:12 AM, hengstrom wrote:

    Tysabri does cause a fatal brain infection, but in some patients with pre-existing JC virus and weaker immune systems (a rare group of MS patients), Tysabri's mechanism of action allows JCV to progress to PML. Tysabri inhibits some T cells to prevent them from destroying an MS patient's own myelin sheath, the fatty protective covering surrounding nerves.

    It should be noted that the number of serious adverse events for Tysabri patients is probably 20% that of SAEs of patients who are subjected to interferon treatment (the current standard of care) while simultaneously Tysabri prevents 75% of the lesions that still occur while on this interferon therapy.

    Black box warnings are indeed not all the same. In Tysabri's case, it is warranted but the severity of MS should result in most patients and neurologists determining that the risk/reward is well justified.

  • Report this Comment On March 16, 2010, at 4:35 PM, sssscooter wrote:

    My wife has had 36 infusions of Tysabri and while there is certainly the risk of PML, her doctors are almost hyper-cautious in watching for it, so it is unlikely to reach a point at where it is untreatable. Also, there has been little discussion related to the greater success rates when treating those who do contract PML. It is not the death sentence it once was. All in all, she could be the poster child for the drug's effectiveness. Not only is the incidence of flare-up of MS symptoms almost nil, there has actually been evidence of repair of the nerves that had lesions on them- an unexpected result for her doctor. When we consider the negative trajectory that her disease was following, this medicine has surpassed our greatest expectations.

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