Are drug-eluting stents safe? That's what a recent FDA panel wanted to know amid the recent controversy concerning the medical device used to help battle arteriosclerosis.

The issue arose when a study by the Cleveland Clinic, published in December's American Journal of Medicine, showed an increased risk of late-stent thrombosis -- or formation of blood clots -- when using drug-eluting stents over the more conventional bare-metal stent.

Stents are used to help keep open arteries that have clogged over time. The FDA approved the first bare-metal stent, developed by Johnson & Johnson (NYSE:JNJ), for use in 1994. The first drug-eluting stent, Cypher, also developed by Johnson & Johnson, was approved in 2003. Since then, the FDA has also approved Taxus, the drug-eluting stent sold by Boston Scientific (NYSE:BSX), making it a two-horse race.

And the competition is slated to increase. Medtronic (NYSE:MDT), which already sells its drug-eluted stent Endeavor in Europe, expects to receive FDA approval next year. Abbott (NYSE:ABT) also plans to come to market with its XIENCE V stent system, which was obtained as part of the Boston Scientific acquisition of Guidant.

The increasing competition comes as no surprise, given the potential revenues at stake. Boston Scientific, in its most recent quarterly filing, estimated that the coronary stent market for 2006 is roughly $6 billion worldwide, with 90% percent of the revenues generated from drug-eluting stents. With such a large percentage of revenues from the market, it is no wonder that stent makers would be concerned that the FDA might pull the plug on drug-eluted stents.

And we have already seen what the failure of a medical or pharmaceutical product can do to a company's future; just look at Pfizer's torcetrapib failure-to-launch or the withdrawal of Merck's Cox-2 Inhibitor Vioxx.

Fool's final word
The FDA concluded that under the recommended usages and the adherence to post-surgical prescriptions, drug-eluted stents have benefits that outweigh their risks. It was when the drug-coated stents were used off-label or not as intended that the risks were greater. Fellow Fool contributor Stephen Albainy-Jenei sees it as having little effect on the sales of drug-eluting stents.

I think the conclusions from the panel represent a good-faith-take on the newer stents, which is good news for drug companies. For instance, Boston Scientific, which generated 30% of its net sales from drug-eluted stents in this past third quarter, already had a 5% drop in U.S. sales of Taxus from third-quarter 2005 -- a move attributed to the recent negative studies.

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Fool contributor Matthew Crews welcomes your feedback -- really! He has no financial position in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.