Pharma Investors: Will Political Talk Scare Them Off?


If or when you watch one of the presidential debates count how many times the candidates say, "the drug companies." Of course, it depends on which party's debate you might be watching, but since I started paying attention to the race in recent weeks, I've taken notice how much those three words seem to be apart of boilerplate answers and statements for a few of the hopefuls.

And in the wake of the one-two punch big pharma has taken this week, I suspect those words may crop up even more in their speeches.

First, there was the study showing Merck and Schering-Plough's cholesterol drug Vytorin may not work much better than an older pill.And then came "The New England Journal of Medicine" report showing antidepressants may not be as effective as doctors and patients may have been led to believe.

The review of dozens of studies on a dozen antidepressants suggests that many more positive clinical trials were published in prestigious and influential medical and scientific journals than negative ones. And that some of the negative studies that found their way into print were spun to look better than they really were.

The report involves all of the makers of the $20-billion-a-year antidepressants: Forest Labs, GlaxoSmithKline,Eli Lilly, Pfizer and Wyeth. In a research note to clients this morning Miller Tabak healthcare analyst Les Funtleyder writes, with the exception of FRX, "...all make antidepressants whose efficacy will be called into question."


There's a law on the books now requiring more clinical trial transparency and most, if not all, of the drug companies have taken it upon themselves to improve their disclosure. The NEJM study was a review of studies done between 1987 and 2004.

I think the confluence of two big stories in one week alleging the drug companies may have hid, downplayed or delayed negative or disappointing results of clinical trials involving enormously popular drug classes will get the attention of the presidential campaigns which will try to make more political hay out of it.

And at a time when economic troubles would suggest the sector benefits as a safe haven, I wonder how much the campaign rhetoric could scare investors and send them looking elsewhere for their financial Rx.

Questions? Comments?