Vioxx is a case in point of how a lack of control causes a multitude of problems. Not allowing, as Mike says, a company to “color” information about the safety of a drug is vital.

Companies have a right to market their product but when marketing steps over the line, the FDA should be there to crack the whip immediately and severely.

The FDA is not there. They have left their post.

Speaking of being at their post, and at the risk of offending by using this as an example…
I was at the Arlington Cemetery the other day and able to see the changing of the guard of the Unknown Soldier. This is the most impressive display of honor and duty that I have ever seen. This video’s focus is on the inspection of the guard and gun.
Watch here.

FDA – you get the idea. Get back to your post.

The severity of the penalty will determine our country’s stance on fraud of this nature. I’m not saying don’t heal the I’ll. I’m saying bring the bastards to their knees, financially or otherwise so that they have no choice but to hand over processes to another company.

Perhaps in this way, the old-school method of deception will find a way to reverse itself by the blooming of honest companies that do things differently. That do things right.

These big pharma companies laugh at these settlements and fines. SEVERE, CRIPPLING penalties are warranted. WAY too many counts of companies that withheld data for over ten years. This is PISS POOR - and you think importing drugs from Canada is dangerous? Knowingly withholding information is sick. Debarrment, jailtime (including the SOB’s who since retired and are supping cocktails on a beach included), and CRIPPLING financial penalties must now occurr and occurr regularly, else we will see the same s$&t ten years from now.

If the FDA took their heads out of the sand and their hands out of each others pockets, that may be a good start. Wastes of space and my tax money.

True, but the case at the Supreme Court turns on when diligent investors should have known about the fraud.

To say that investors are allowed to completely rely on a company’s filing statements is to negate any duty investors have to discover the fraud. I don’t doubt that the courts give some deference to small investors relying on a company’s filing statements, but complete deference to their reliance seems a bit much. I think the real question before the court is two fold:

1) To what extent do investors in different categories have to engage in diligence despite a company’s statements to the SEC; and

2) At what time would a diligent investor have known about the purported fraud?

I don’t know what the answer to the first question will be, nor do I know the background case law in this area. I can see the answer to the second question going either way. The justices were obviously right in harshly questioning Merck’s lawyer. His argument is a hard one to make. However, the court has frequently questioned harshly and then gone the other way.

so, to be clear, this case hasn’t progressed to the “merits” of the arguable fraud claim, yet. The parties are still arguing over whether the investors will ever have any day in court at all — i.e., any chance to prove that Merck acted badly.

Based on Monday’s widely skeptical lines of questioning — from almost all of the Justices on the Court — I think the investors will get the chance, one day, to prove-up the matters you and I are now debating.

Namaste

Merck had a colorable argument that Vioxx did not increase heart attack risk. The whole truth, through their eyes, can be argued to have been exactly what they disclosed. To an impartial observer, however, the weight of the argument for Merck’s position could never have sustained it.

Merck isn’t saying that they were lying. They are saying that they were duty bound to interpret the evidence presented in the most favorable light, that investors should’ve known this, and that investors should’ve examined the evidence impartially.

I still think that Merck will lose. However, I don’t think it’s as slam-dunk as commentators are making it out to be.

Your point (2) gets it exactly backwards.

When Merck speaks about matters that are going to be material to its financial results (like Vioxx revenue trend-lines, and the drug’s continuing place in the market) it must tell the whole truth, and nothing but — under applicable federal securities rules.

That is what this case is all about. Investors must be duly diligent, but small common stock investors are generally entitled to rely on the company’s statements, when made in SEC filings — as many of these were.

So, for Merck to now argue, essentially, that “we were only joshing you — and you should have known that, much earlier” — as a statute of limitations escape hatch. . . is simply jaw-slacking.

Either Merck wants the Supremes to decide (an issue not properly before the Court, however) that Merck committed fraud in its SEC filings, or it wants the Supremes to decide that investors should have no remedy for false statements about arguably material matters — so long as Merck was able to continue — and perfect, the ruse.

Either way, Merck will lose — in my considered opinion.

Namaste

1) Merck had a “duty” to protect its brand within the limits of the law. They argue that they were doing so by denying Vioxx increased heart attack risk.

2) On the other hand, investors have a duty to wade through Merck’s BS about Vioxx and discover the truth, which, pardon my 1990’s TV drama reference, was out there.

3) Merck is therefore arguing that it was legally denying an increase in risk, but impartial observers should have seen this denial as a required farce.

What this really says it that the FDA reporting and risk-communication regulations are insufficient to force companies to be honest about the realities of the known risks for their products. Perhaps we need to include more than just Class A data (prospective, double-blinded, placebo controlled trials). How Merck got away with saying the things they did about Vioxx despite the mounting evidence is still beyond me. However, the system that allowed it to happen needs to change. Companies with billions at stake need strong incentives to remain honest, open, and transparent.

Fair enough. I seem to have slightly overstated the case (as to a tangential matter).

My central premise, here and elsewhere — and the object lesson of the Supremes oral argument news, of Monday — is that the primary responsibility for drug monitoring and safety — after the FDA’s approval, resides and remains — always with the company that manufactures and markets the drug.

About that, there should be no quarrel.

I salute those who sniffed out Vioxx’s elevated CV event risks early-on. I think it “too cute, by half” to say stockholders must do more than the company, itself — to deduce emerging fraud — in the company’s own statements.

That is a rule unsupported by reason.

And I think the Supremes will so hold — (great riff, Art!).

Namaste