It's hepatitis C drug week at the Food and Drug Administration's White Oak campus. On Wednesday and Thursday, panels of outside experts will meet to review Merck's (NYSE: MRK) boceprevir and Vertex Pharmaceuticals' (Nasdaq: VRTX) telaprevir, respectively.

The current treatments -- Merck's Pegintron and Roche's Pegasys -- only cure about half of the patients that are treated with them. When you add in boceprevir or telaprevir to the standard of care, the cure rates jump to as high as 66% and 79%, respectively. They're even pretty good at ridding patients of the virus that failed a previous treatment.

Rubber stamp?
The FDA releases briefing documents for the panel members ahead of the meeting. The documents are basically the only look investors get into the thinking of the agency reviewers before they hand down their decision on whether to approve a drug.

For the most part, the agency seems to be wholeheartedly behind both drugs. There were no real surprises in the efficacy portion of the review, except that the FDA's analysis of telaprevir actually pegged the cure rate slightly higher than the data seen previously by investors had it -- a surprise, but at least it was in the right direction.

Like all drugs, boceprevir and telaprevir have some side effect issues. Boceprevir seems to cause anemia in some patients, and rashes are seen in some patients taking telaprevir. But they're manageable side effects that pale in comparison to the unmet need of hepatitis C patients.

As most people see it, the advisory panel is being held because the agency has to. Unless the outside experts spot something that the internal reviewers missed, boceprevir and telaprevir seem home free.

That's kind of scary
When everyone assumes a positive event, there tends to be very little upside and substantial potential downside. Merck, which has plenty of drugs, would see a minor hit if the panel recommended against approving boceprevir. Vertex, on the other hand, would be devastated.

Don't get me wrong. I can't point to any problems the companies might have over the next two days. It's the problems that I can't foresee that are worrisome. Panels nitpicking about something that seemed minor, which somehow gets blown way out of proportion? It wouldn't be the first time.

This should worry you more
The biggest concern for Merck, Vertex, and Vertex's marketing partner Johnson & Johnson (NYSE: JNJ), is what will happen after the drugs get approved. There are plenty of drugs coming up from behind.

Novartis (NYSE: NVS), Bristol-Myers Squibb (NYSE: BMY), Pharmasset (Nasdaq: VRUS), and Achillion Pharmaceuticals have drugs in various stages of testing. Will they all make it to market? Probably not. But it only takes one or two with slightly better efficacy or side effects to pull patients away.

Gilead Sciences (Nasdaq: GILD) has six drugs in its pipeline that treat hepatitis C. They're early in development, but the plan seems to be to combine them to make a cocktail like it has for HIV. The company has partnered in the past with cocktail drugs such as Atripla, but Gilead's new quad pill that it owns exclusively shows it'll take control if it has the compounds to make it work.

Where will the new drugs leave telaprevir and boceprevir? If they can get into a cocktail or develop one on their own -- Vertex has three hepatitis C drugs in development, for instance -- the drugs may not hit their full potential.

Investors need to be careful here. There's no doubt that the drugs are rule-breaking game changers, but I worry that they may be overhyped. Even the best company can be a bad investment at some price.

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