Arabian Business Weekly Update August 28, 2005

The drug industry needs a radical re-think after last week’s ruling against Merck. Last week’s US court ruling that Merck must pay US$250 million to the family of a man who died after taking its painkiller, Vioxx, does not necessarily signal the end for the pharmaceutical giant. But the firm certainly faces an uncertain future. Thousands more lawsuits are expected to be filed after the landmark decision, and although Merck is set to appeal, it has to be seen as a massive body blow not just for the firm but for the industry as a whole.

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By  Richard Agnew Published  August 28, 2005

Bitter pill to swallow|~||~||~|The drug industry needs a radical re-think after last week’s ruling against Merck. Last week’s US court ruling that Merck must pay US$250 million to the family of a man who died after taking its painkiller, Vioxx, does not necessarily signal the end for the pharmaceutical giant. But the firm certainly faces an uncertain future. Thousands more lawsuits are expected to be filed after the landmark decision, and although Merck is set to appeal, it has to be seen as a massive body blow not just for the firm but for the industry as a whole. This will not be a one-off case. It follows Pfizer’s recent decision to suspend sales of its arthritis drug Bextra in the Middle East after regulators highlighted the drug’s risks. More than 4000 Vioxx-related cases have also been filed already, and lawyers say they expect up to 100,000 to follow. The pharmaceutical sector — which faces the twin pressures of the threat of generic medicines and the constant demands of the stock market — therefore needs to have a radical re-think before consumer confidence falls to an all-time low. As Astra Zenica boss Sir Tom McKillop admitted recently, “a depressing grey mist is descending on the industry.” It’s only solution is to rid itself of the short-termism that, rather than protecting investors, is hurting them. More worrying than that, however, is that as regulatory risks increase and margins get squeezed, the first casualty of the industry's woes will be R&D spend. With the spread of antibiotic resistant superbugs and the threat of a global flu pandemic, this is the last thing the public can afford. Naturally, the opportunities will always remain for companies to emerge with the blockbuster product that will affect the lives of millions. Until that time arrives, the pharma industry needs to return to basics and regain the trust of the consumer. ||**||Crunch time for Iraq|~||~||~|The events of the past week in Iraq do not just represent a crucial point in the country’s history, but also for the US and UK governments. Constitutional talks between Iraq's community leaders are still dragging on — highlighting the country's divisions, instead of any potential for unity. As they near a third deadline for the constitution to be drafted, which looks no more likely to be met than the previous two, politicians claim the US is pushing them to make decisions too quickly and that the constitution is being drawn up to an American rather than an Iraqi timetable. But pressure from Washington is not likely to relent. Few people would still disagree with the assessment that the US and UK’s three-year campaign in Iraq is a failure. Even they would have to reconsider if Bush and Blair can’t come out soon and say that they have put the country on the path to democracy. ||**||Murder most horrid|~||~||~|THE events surrounding the killing of an innocent Brazilian man in London last month continue to defy logic. As we report elsewhere in this magazine, it is now beyond any reasonable doubt that Jean Charles de Menezes was executed at point blank range by British police, when he clearly posed no threat to anyone. There is no way possible that he could have been mistaken for a suicide bomber, as the police initially claimed. Put simply, Jean Charles de Menezes was murdered by trigger happy police. The thoroughness of the British justice system means that his killers will almost certainly be brought before the courts. But that is some years away. In the meantime, the only way confidence is the British police can be restored is for chief commissioner Sir Ian Blair to resign. And he must do so now. ||**||

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