The FDA Hammers Pfizer

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I remember a time when the COX-2 drugs, Pfizer's (NYSE: PFE) Celebrex and Merck's (NYSE: MRK) Vioxx, were a major story, not because they were a danger to public health, but because they represented an advance in medical care. The COX-2 drugs were thought to be a good thing for those people with minor and chronic pain who frequently used non-steroidal anti-inflammatory drugs (NSAIDs) like ibuprofen and naproxen. The problem with the NSAIDs is that they cause all sorts of problems related to intestinal bleeding. This is not a trivial matter: More than 100,000 people are hospitalized each year for this.

Seeing a need for safer treatments, the COX-2 drugs were developed with the specific purpose of keeping the beneficial properties of the NSAIDs without the nasty intestinal bleeding side effect. Drugs like Celebrex and Vioxx became major blockbusters because of this property.

Unfortunately, as it turns out, these COX-2 drugs have problems of their own. Merck voluntarily withdrew Vioxx last year when a clinical study showed that patients who used Vioxx for longer than 18 months had an increased risk of heart attack and stroke. On the basis of that finding, there were suspicions that other drugs in the class could have the same problems.

In February of this year, the FDA's Arthritis and Drug Safety and Risk Management Advisory Committee convened to discuss all of these drugs. It then voted on whether or not to recommend that the FDA allow specific drugs to remain on the market. While Celebrex received a positive 31-1 vote in favor of remaining on the market, Pfizer's other COX-2 drug, Bextra, and Merck's Vioxx squeaked by with 17-13 and 17-15 votes, respectively.

In light of that close vote, it should not be surprising that the FDA asked Pfizer to pull Bextra off the market yesterday. Sales of Bextra in both the U.S. and Europe have ceased, at least for the time being, since Pfizer disputes the FDA's position.

Bextra was certainly a blockbuster, with over $1.3 billion sales in 2004. There are not many companies that could take this kind of blow and go on with business as usual. But Pfizer is one of them, since Bextra was just a drop in the bucket compared to the company's overall revenue of $52.5 billion last year. That is certainly one advantage to owning companies like Pfizer in an era of intense scrutiny of drug safety.

For additional articles on the biotech industry, see:

• Has Elan Been KO'd?
• Pfizer Pfaces Its Pfuture
• The Best Company I've Never Owned
• Better Times at Biogen IDEC

Merck is a Motley Fool Income Investor recommendation.

Fool contributor Charly Travers is the Motley Fool Rule Breakers biotech analyst. He does not own shares of any company mentioned in this article.