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Merck's Vioxx Gets OK for Child Arthritis

Robert Steyer

Merck(MRK Quote) said Wednesday that the Food and Drug Administration has approved its arthritis drug Vioxx for treating juvenile rheumatoid arthritis.

The FDA's decision allows Merck to market the drug directly to physicians treating this disease, which is the most common form of arthritis in children, affecting an estimated 30,000 to 50,000 in the U.S. The drug is approved for children as young as two years old who weigh at least 22 pounds.

Vioxx has multiple FDA-approved uses, with the most recent coming in March for treating acute migraine headaches in adults. The drug is approved for treating the signs and symptoms of rheumatoid arthritis and osteoarthritis in adults, management of acute pain in adults and painful menstrual cramps.

Vioxx has come under greater medical and Wall Street scrutiny since a recent study said patients taking higher doses of the drug had triple the risk of heart problems -- including heart attack or death -- compared with patients who weren't taking other anti-inflammatory drugs.

The study also said that such risks were elevated when comparing patients who took high or low doses of Vioxx vs. those who took Celebrex, made by Pfizer(PFE Quote).

The study was financed by the FDA, and the study's lead investigator is an FDA staff member. The study used data compiled by the giant California-based health maintenance organization Kaiser Permanente, which said it would review the offering of Vioxx to clients. The review, however, is not considered urgent, a spokeswoman said recently. It's the type of review that the HMO takes when research raises questions about any drug, she said.

Merck ripped the study's methodology. "This analysis is a retrospective database analysis -- not a clinical trial," the company said two weeks ago. "Observational analyses have limitations, often conflict with each other and must be interpreted within the context of data from large, randomized, controlled clinical trials."

Meanwhile, Merck will be sweating out another insurance company's comparison test.

An impending review by Aetna(AET Quote) worries David R. Risinger of Merrill Lynch, who recently issued a report saying he expected the Aetna results also to show an elevated risk of "acute cardiac events" of Vioxx vs. Celebrex and other drugs that treat arthritis and relieve pain.

"We believe another negative study for Vioxx in such a short period following the Kaiser study could accelerate market share loses for Vioxx beyond what we recently forecasted," he said in an Aug. 30 report in which he reiterated his neutral rating on Merck.

"While retrospective studies do not provide definitive evidence of a cause-and-effect relationship between Vioxx and cardiac events, the 'headline' effect from the reporting of these studies could increase concerns among payers, patients and physicians, negatively affecting the brand," said Risinger. (His firm is a market maker in the stock and has a non-investment banking relationship with Merck. His research report says one or more members of his analyst team own shares in Merck.)

Merck's stock has been essentially flat since the FDA-sponsored study report was issued at a medical conference in France just over two weeks ago. On Wednesday, the stock was trading at $45.68, down 10 cents.