'Very Serious' Allegations

It appears that at least one top executive at Schering-Plough, executive vice president Carrie Cox, sold millions of dollars worth of company stock after the trial ended but before the results were made public. How concerned are you about the timing of such stock sales?
Before it's made public, if you have insider information, it's definitely illegal. That bothers us quite a bit. They kept it for so long [without releasing the results] then tried to rehabilitate the study and then that fails. Do they then start dumping the stock? We really want to get into this a little more. [Stephen Galpin, a spokesperson for Schering-Plough, responds: "The company has a rigorous process that executives follow before initiating any transaction in company securities including pre-clearance with a securities lawyer. Carrie Cox followed these processes as well as filing required SEC disclosures about the transactions on time. To date the company has received no inquiry from a regulatory body relating to her trades. These trades go back to the spring of 2007 and the data for this trial were only unblinded about two weeks ago."]

According to estimates, the companies have spent more than $250 million in the last couple of years to advertise Vytorin.
In April 2006, when the trial ended, I probably didn't know what Vytorin was. But with the heavy advertising in the last year or so, we all know what it is now. Those ads, which show the food and the relatives [two sources of cholesterol], target a certain patient. The assumption is that lower cholesterol means reduced plaque means reduced risk of heart attack and stroke. But in some patients in this study, the amount of plaque increased … What we're wondering now is, was there an uptick in advertising after they knew the trial results? [Irvine declines to answer that question directly but says the company has "supported Vytorin competitively in all aspects of marketing, sales and managed care since it launch in 2004, including direct to consumer advertising ... in a manner that is consistent with what would be expected of a top-tier product in a highly competitive therapeutic category."]

Doctors wrote about 18 million prescriptions for Vytorin and about 14 million for Zetia in 2006, making them among the most commonly prescribed cholesterol-lowering drugs, and their popularity has continued to grow. Is there concern here that some of those patients might have been better served by other cholesterol-lowering drugs--or, at least, could have saved money by using a generic version of Zocor?
From what I understand, it's just under $4 per pill for Vytorin and about $2 for Zocor [or generic versions].

That could be an issue for patients who are on a tight budget and are paying out of pocket.
It's also an issue for the government, and for taxpayers, because of Medicare and Medicaid--we pay for all that. So we want to see how much Medicaid and Medicare has spent on Vytorin since April 2006 to the present day.

Did the FDA approve these drugs prematurely?
Drug studies go through four phases, really--the fourth is always the American people. You had very limited studies, and the theory behind it is, you had a key group of people you are trying to treat. The protocol of the study--the FDA approved that--and therefore the companies could use it. I have a problem, though, with: Where is the FDA? Whey aren't they bringing all this out? To get them to do anything after they approve a drug, it's hard.

So what happens now?
More letters are going out [from Stupak's committee to the companies] zeroing in on specific issues. We're asking specifically about the cashing in on stock options. There will be hearings ... The night before the hearings, they'll probably drop off all the documents and then we'll probably find the nuggets we're looking for.

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