Healthy Skepticism Library item: 15718
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Loftus P.
Judge Allows Online Posts In Schering Vytorin Lawsuit
CNN Money.com 2009 Jun 2
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=38351859
Full text:
A federal judge will allow anonymous postings on a raucous online forum to be remain in a lawsuit accusing Schering-Plough Corp. (SGP) of misleading investors about the results of a cholesterol-drug study.
Judge Dennis Cavanaugh of the U.S. District Court in New Jersey on May 18 denied Schering-Plough’s request to strike from the lawsuit comments posted on the Web site CafePharma.com, which suggest Schering insiders knew the study had failed well before the results were made public. He also denied Schering’s request to exclude statements provided to plaintiffs from six anonymous former company employees.
The “Enhance” trial of the cholesterol drug Vytorin — which is marketed by a joint venture of Merck and Schering-Plough — ended in 2006 but its results weren’t released publicly until January 2008. The study found Vytorin was no better than a generic drug at slowing artery thickening, causing sales to plummet and damaging the stock prices of both companies.
Schering shareholders subsequently filed suit, alleging executives violated securities laws by making false and misleading statements and omissions that artificially inflated Schering’s share price between 2006 and 2008.
Schering-Plough has said its top officials remained blinded to the final results of the study until shortly before they were released publicly, and that it took so long to release them due to data quality problems that required follow-up analyses.
Schering-Plough, Kenilworth, N.J., has since agreed to be acquired by Merck of Whitehouse Station, N.J., in a cash-and-stock deal originally valued at $41 billion. The transaction is expected to close by the end of the year.
CafePharma is a Web site aimed at pharmaceutical sales representatives, who trade anonymous gossip and information about their employers. The message boards are grouped by company.
In March 2007, the author of one post on the Schering section of CafePharma claimed to have a “buddy” in Schering’s research arm. “He says that the study is a bust,” the post stated. Another post in 2007 stated, “Heard it crashed and burned!” A third, detailed post about the study stated, “Adding Zetia to high dose generic statin provides no real benefit.” Vytorin is a single-pill combination of the drugs Zetia and simvastatin.
The lawsuit, filed by several U.S. state public-employee pension funds, claims the substance of these posts was confirmed in 2008 when the results were finally made public.
Schering-Plough asked the judge to exclude these posts from the lawsuit because their authors’ identities couldn’t be confirmed. It’s possible they were written by rival company reps, short sellers or other “mischief makers,” the company argued. CafePharma has a policy of not recording any identifying information of its posters.
Schering also tried to discredit CafePharma by calling it “the cyberspace equivalent of scrawls left on a men’s room wall.” It’s true — many posts are filled with profanity and slurs, and have little to do with the task of marketing prescription drugs.
But Judge Cavanaugh ruled that both the CafePharma postings and the confidential witness statements “are relevant to the ultimate issue” because they “purport to show the timing within which defendants became aware of the Enhance study’s results.”
Members of Congress, who are investigating Merck’s and Schering’s actions, also have sought information about the CafePharma posts.
Schering and other defendants, who include investment banks that did business with Schering, have filed motions to dismiss the lawsuit’s claims. No trial has been scheduled.
