Big Changes For Big Pharma

Fallout from Vioxx and Celebrex will create plenty of pain in the sector. Here are six trends that will alter the industry in 2005. The fear factor surrounding some commonly used pain-relieving drugs is at fever pitch. Merck (MRK ) pulled Vioxx from the market in October due to strong evidence of an increased risk of cardiovascular problems. And questions also have been raised about the safety of Celebrex, made by Pfizer (PFE ), and about naproxen, which is sold without a prescription as Aleve by German drug giant Bayer (BAY ). The revelations of elevated risk for heart attack and stroke with long-term use of these so-called Cox-2 inhibitors could result in billions of dollars in potential liability and considerable damage to a hugely profitable drug category. Beyond the immediate financial consequences, drug companies now must take a hard look at how they do business, analysts say. And that could mean quite a hangover for Big Pharma in 2005. Everything from budgets for consumer advertising and physician marketing to how drugmakers disclose study information and make decisions on research projects are now under new scrutiny. The problems with the Cox-2 inhibitors "will cause a shift in the internal review of pharmaceutical companies and how they look at risk and reward," says Weidong Huang, analyst at TimesSquare Asset Management in New York City (see BW Online, 12/27/04, "Candor Can Immunize Big Pharma"). How will drug companies cope? Here are some of the likely changes coming in the post-Cox-2 world:

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