[UPDATED -- 05.20.08 8 AM EDT: This post has caused me to set out a broader inquiry into the way Schering discloses pay -- and actually pays -- its executives. Take a look.]
Ms. Wolf, the Corporate Secretary, Vice President - Governance and Associate General Counsel of Schering-Plough (her letter, covering the 2007 proxy, is above), just wrote a comment over at Pharmalot.com, in response to the Forbes story, mentioned earlier today on this blog -- which contained the following assertion (see last sentence of the tenth paragraph, in her comments -- also posted at Forbes.com):
. . . .Market capitalization, which the writers focus upon, was not a performance metric for any incentive plan since Fred joined Schering-Plough. . . . [Emphasis supplied.]
Mr. Hassan worked at Schering-Plough during 2006, right? Right. Trust me, he did.
Let us then take a look at the text of page 25 of the proxy describing compensation policy, for that year (the proxy to which Ms. Wolf's letter, imaged above, was attached):
. . . .General Performance Metrics — Used
by the Compensation Committee in
considering total compensation levels
Three-Year Growth in Market Cap.
Increased by $9.7 billion or 38%.
January 1, 2004 — $25.5 billion
December 31, 2006 — $35.2 billion. . . .
[Emphasis supplied.]
Ahem. It is actually the first metric listed for that year, Ms. Wolf. [More on why that is entirely-inappropriate, appears here.]
An image of that actual page-filing [click to enlarge!]:
It would seem, Ms. Wolf -- that even though you very-likely prepared, filed and signed-off on this proxy statement -- Messrs. Becherer and Hassan (to say nothing of Mr. Thomas J. Colligan, then the Chairman of the Board's Audit Committee) -- might beg to differ with yours, to Pharmalot.com (and to Forbes.com).
My comment box is open, here. So, Please feel free to correct me if I am mistaken, Ms. Wolf.
2 comments:
A Failed Attempt to Improve Misperceived Greatness: The ENHANCE Trial
While it seems that sponsors of clinical trials usually end up with results that clearly favor their meds studied in their trial, there are rare exceptions, and Merck and Schering proved that with their disappointing ENHANCE Trial, which many have heard about through the media not long ago. The drug studied was Vytorin, comparing it with Zocor.
Vytorin is a combination med for high cholesterol and contains Merck’s Zocor, which is now generic, and Schering’s Zetia, which works differently than Zocor, which is one of many statin drugs. Both Vytorin and Zetia are co-promoted by Merck and Schering. So, several years ago, an outcomes study was initiated to prove superiority of Vytorin over Zocor as monotherapy. The trial was named the ENHANCE trial.
After several years passed, a disappointment arrived for the sponsors of this trial, which was first brought to the attention of Schering in March of 2007, yet the results existed since the spring of 2006, I believe.
The disappointment is that Vytorin lacked anticipated benefit or superiority over Zocor. Since about 1 million scripts were written for both Vytorin and Zetia every week in 2007, combined with what I believe was about 5 billion in revenue for these two drugs that year, this was a problem for the drug makers. Perhaps for Schering in particular, it was more of a calamity, since over half of their profits and earnings were from these two drugs.
Being the responsible corporations both companies are, of course, alterations occurred after such events that fractured numerous rules and regulations with clinical trials.
The trial sponsors delayed the release of the trial results for secrecy reasons, it has been speculated. Results from the trial existed, yet were not disclosed at the time of their discovery. After several months of possessing these trial results that were only known to the manufacturers, they created or implemented some atrocious tactics to improve the trial’s unimpressive results. At the end of 2007, the companies changed the primary endpoint of the trial, which is what the results were measured upon during the entire course of the trial. Since their deliberate concealment of these trial results was clearly wrong, to respond to those who asked where the results were actually while such trial manipulation was occurring and results were being kept secret, Schering stated that continued data analysis from the trial results was the etiology for the delay.
With clinical trials, case report forms are used to record data from the trials, and are created in a manner where further analysis is not normally necessary, as such forms are quite clear and often not subject to interpretation. So at the end of 2007, both Merck and Schering got the attention of relevant government officials who contacted both companies regarding this ENHANCE trial, and an investigation began into the activities of both companies regarding this trial at that point.
This became a catalyst for the ENHANCE trial results to be finally released at the beginning of 2008, which caught the attention of major media organizations. In the spring of 2008, a very large cardiology meeting was held, where the audience was told to stick with statins due to this trial’s lack of outcomes for Vytorin, when the ENHANCE trial was discussed at this meeting. Furthermore, a cardiologist at this meeting also suggested that a moratorium should occur with the utilization of Vytorin, since statins are much less expensive, and are highly regarded, as they have been available for a couple of decades. Of course and as expected, Merck and Schering were not pleased, nor were they surprised at the review of Vytorin at this particular meeting. The following month after this cardiology meeting, Schering’s earnings dropped by 48 percent, as I recall.
Now, these cholesterol drugs promoted by Merck and Schering, Zetia and Vytorin, were aggressively marketed in a number of ways, including investing I believe about 200million dollars in 2007 for DTC ads for these products. To add to this, and soon after both meds were launched, reps from both companies made inferences to doctors about outcomes regarding plaque accumulation and how Vytorin was superior in that area, which, of course, this ENHANCE trial proved it is in fact not the case whatsoever. It did not matter, apparently, to both Merck and Schering that such a claim is entirely void of proof, which Is not unique to any pharma rep, in my opinion. Yet what is known now is that these companies performed junk science with their deliberate manipulation of this ENHANCE trial. Last year, Zetia and Vytorin had about 20 percent of the cholesterol lowering market. It does not seem that there will be an increase of this percentage because of this scandal.
Worst of all is the harm caused to both doctors and patients. The ENHANCE trial concerned and confused both of these participants in the health care system. Furthermore, it’s likely they were devastated by being so clearly misled by the marketing of both Merck and Schering regarding the false benefits of Vytorin they were led to believe by the companies that promoted them.
This whole situation is another example of the corruption of the scientific method by placing profits over the well-being of patients. Most were shocked by Merck behaving in such a way in particular because of what use to be their excellent reputation as an ethical pharmaceutical company. And this alone shows the progression and infiltration of such damaging corruption that desperately needs to be stopped and corrected for the sake of others.
Don’t just say something. Have something to say- to the right people, with conviction and with others who share your views.
“Waste no more time arguing what a good man should be. Be one.” --- Marcus Aurelius
Dan Abshear
Thanks for this, Dan!
Post a Comment