The Vytorin Slump: Is This The Bottom?
2 CommentsBy Ed Silverman // June 23rd, 2008 // 7:25 am
The lipid limbo continues, but now the key question is whether Schering-Plough and Merck, which jointly market the controversial cholesterol pill, have managed to prevent further damage to its dwindling market share.
The latest numbers were posted late Friday - when companies hope less-than upbeat news will go unnoticed - total prescription volume inched down, but only by a little. Vytorin’s share in May declined to 7 percent from 7.2 percent of all scrips written for cholesterol meds, while Zetia’s share slid to 5.3 percent from 5.4 percent. The next question, of course, is what, if any changes managed care will make over the next few months that could further erode market share.
Condor
There are far more questions that remain, IMO — First, will Vytorin/Zetia lose preferred status on the reimbursement schedules, raising co-pays, and effectively forcing (more) price cutting on the Joint Venture’s operations?
Next, will the Congressional displeasure focused keenly on Schering, lead to new legislation — beyond the general broad-brushed “reform mantra” now taking hold?
Additionally, will Merck revise its own guidance on the size/range of the downturn it expects from its half of the J/V (given that these declines, through five months of 2008 imply a much closer to $900 million fall-off, than the original $700 million estimate) — and, in the process, hang Schering out to dry (once again!), over SGP’s continued-silence on the topic of forward-looking guidance/statements re the Cholesterol Franchise’s future?
Finally, is $1.5 billion “enough” of a charge (Hassan’s April 2008 PTP) to cover all of this, the litigation, investigations, eroding share, etc.?
Who knows?
We’ll likely learn more about Schering when MERCK reports its own Q2 results, than when Schering itself reports its own Q2 — that much is certain.
Great stuff, Ed! — BTW I have a few posts up on all these topics, at mine.
SP 2
I think that it’s only the bottom if they are cleared of wrongdoing in the ENHANCE fiasco. Given what has been heard and seen across cyberspace, this seems to be quite unlikely. Any discovered wrongdoing will reflect even more badly on the company and prescribing physicians as well as prescription takers will probably be very disgusted. Of course only time will tell, but the clock appears to be ticking.
Mr. Hassan, Ms. Cox and friends could always make another “tough” decision and lay off 10% more of the SP employees. This appears to be a longstanding MO for them.