Amgen's Drug-Approval Dilemma

The Food and Drug Administration and drug companies alike have drawn criticism recently for being too lax with safety. With the withdrawals of Merck's (NYSE: MRK  ) Vioxx and Biogen-Idec's (Nasdaq: BIIB  ) and Elan's (NYSE: ELN  ) Tysabri in the headlines, some investors might agree. But a recent case involving Amgen (Nasdaq: AMGN  ) may shed a more sympathetic light on Big Pharma.

The Los Angeles Times reports that Amgen is being sued by a group of people who participated in a clinical trial for GDNF, an experimental medicine for Parkinson's disease. The suit, filed in Kentucky, marks the second time GDNF trial patients have sued for access to the synthetic protein. Unfortunately, GDNF is no longer in development. Amgen was forced to discontinue the program after studies on monkeys suggested that high doses caused brain damage.

With cases like the GDNF lawsuit, drug developers and the FDA are stuck between a rock and a hard place. They are expected to deliver new medicines as quickly as possible to patients desperately seeking new treatment options. Delays in approval can cost lives and, from an investing standpoint, millions of dollars in lost sales. At the same time, the FDA and drug outfits are roundly criticized when problems are discovered after drugs are on the market.

Recent media coverage can only bring greater scrutiny to the industry's increasing tug-of-war between innovation and safety. As a result, the once-staid stocks of big pharmaceutical concerns and profitable biotech outfits may be subject to greater volatility. Even conservative drug-stock investors could be in for a bumpy ride.

More pharmaceutical Foolishness:

• Media Drug Withdrawal?
• Patented Drugs Fair Game in R&D
• Able Labs Disabled

Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.