Class Action Lawsuit Involving Zelnorm

Novartis had been marketing its drug Zelnorm (also called tegaserod maleate and incorrectly called Zelnorm) with stunning success since it was first placed on the market for women in 2002 for irritable bowel syndrome. In August 2004, it was able to expand its market share when Zelnorm was given the additional indication for short-term treatment of chronic constipation in men and women under the age of 65. Last year, Zelnorm was honored as having one of the best prescription drug ads by IAG Research, a company that rates TV ad effectiveness. The “tummies” campaign, which turned women’s bellies into billboards, was credited with boosting sales growth to $561 million in 2006 to relieve IBS. Of course, these kinds of accolades do not come cheap: Novartis spent $325 million in three years marketing Zelnorm, which costs consumers about $200 a month to use as recommended.

  • Last month, the FDA recommended that Zelnorm be removed from the market after reviewing data that found users of Zelnorm experienced heart attacks, strokes, and angina at a rate 7 to 8 times greater than those who took a placebo. To show a correlation between an adverse event and a drug, researchers like to see a 2 to 1 ratio between the incidence of the adverse event in the active group versus the control group. A ratio of 7-1 is off the charts. Novartis is claiming that the incidence rate is the same for the active group taking Novartis as it is for the general population. But unless the placebo the control group was given was a miracle drug, it is hard to figure how that is possible. Did the placebo reduce the risk of stroke, heart attacks, and angina?

Because the FDA asked Novartis to take Zelnorm off the market, as opposed to Novartis making an affirmative choice to remove this potentially life-threatening drug, our lawyers suspect that the data which indicated that Zelnorm could cause serious and even fatal injuries was available to Novartis before Zelnorm was removed from the market. I say “suspect” because no discovery has been conducted. But from my experience with these companies, it is hard not to prejudge. Novartis estimated on its 2007 1st Quarter Conference Call that it would lose $600 million in sales in 2007 as a result of Zelnorm being taken off the market. Analysts predicted this would rise to $1 billion by 2012. If you are looking for a motive, here it is.

What about the fear of lawsuits? Tim Anderson, a Prudential analyst, said that lawsuits and legal costs will be “largely immaterial to a company of (Novartis’) size.” Another analyst added that “only” 1,000 to 2,000 patients suffered these problems while taking the drug. Depressing.

Clearly all of the facts are not yet in as to the details of the risk and whether this drug should have been on the market. Many are patting the back of the FDA saying they are more aggressive about public safety in the post-Vioxx era. But Zelnorm was rejected as too risky last year for a second time by a European Union health advisory panel. This begs the question: what did the FDA not see in Zelnorm that the European Union saw and rejected? (Unfortunately, the fact that Zelnorm has not been approved by the European Union for this Swiss company is unlikely to be admissible should these cases go to trial.)

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