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Jan 17 2008 News Links
Markets News Afternoon: US and European stocks slide; Dublin market rises
Annual Irish Consumer Inflation falls to 4.7% in December 2007
Euribor 3-Month Inter-Bank Rate falls to the lowest level since the onset of the Credit Crunch in August 2007
European Central Bank warns again that it may raise interest rates
Slashing Energy Waste in China - Energy efficiency would do 'the most, the quickest,' to reduce CO2 emissions - World Bank
Study links corporate performance to employee enablement - Economist Intelligence Unit
Markets News Thursday: Asia-Pacific and European stocks rise
Thursday Newspaper Review - Irish Business News and International Stories
Big drugs companies raided by European competition regulators
Thursday
Newspaper Review - Irish Business News and International Stories
Principal news stories from the Irish Times,
Irish Examiner, Financial Times and New York Times.
 The Irish Independent reports that Glanbia will bring the curtain down on its long and
expensive involvement in the meat industry when it completes
the sale of its remaining meat interests to a management-led
consortium.
By selling the rump of its once mighty meat business, the
company is completing a process which current chief John
Moloney put in train once he had identified a new strategy
for the former company.
Instead of involving itself with low margin business such
as pig slaughtering, the company, formerly called Avonmore
Waterford Group, would focus on areas such as cheese,
nutritional ingredients and consumer foods with a
nutritional emphasis.
Given this strategy, it was only a matter of time before
the meat business was put on the block and analysts
expressed little surprise at the move.
"It's a low margin business and the sale will not have
a significant impact on the group," one analyst said
last night. He added that the price is likely to be in the
low single digits -- well under €10m.
Even if it did make €10m, this would still be only a
fraction of the huge sum written off by Glanbia during the
turbulent period between 2000 and 2004.
The meat business is the leading pork slaughterer and
processor in Ireland and it processed 1.2 million animals,
or 48.7pc of the national supply last year.
While it produces a wide range of products, none of its
output is branded.
Employing 850 people, the business operates from four
facilities in Ireland, including two modern slaughtering
plants at Roscrea, Co Tipperary, and Edenderry, Co Offaly.
It also operates the only pork- head boning facility in
Ireland at Clara, Co Offaly, and a bacon curing and
processing facility at Jamestown in Co Leitrim.
As well as slaughtering animals, the company is also one
of the largest pig-farming operations in Ireland, with 4,500
sows across six farms.
In 2001, the company took a modest net exceptional charge
of €5.53m. However, when worsening trading conditions
prompted the sale of its UK consumer meat division a year
later, the loss on the sale came to €65m, while for 2001 as
a whole it wrote off €80m.
Given that it operates in a difficult, low margin
business, there is likely to be little or no competition to
the MBO team, which is being advised by buy-out specialists
BDO.
"They know the business and are the best buyer,"
one analyst surmised.
The Irish Independent also reports that the pension funds of Irish private sector workers have shed
€4bn of their value in the first two weeks of the year
alone, it emerged last night.
The losses this year so far match the damage done to
private pensions for all of 2007.
Fears of a recession in the US and the worsening
international banking crisis have triggered day-after-day
losses on international markets over the past two weeks.
This has meant that between 3pc and 4.5pc has been wiped
off Irish managed pension funds in the past fortnight,
according to Noel Collins, a senior consultant with pensions
advisers Mercer. The highest losses have been suffered by
those funds with the largest exposure to equities.
Disappear
The Irish Stock Market made modest gains yesterday but so
far in 2008 it has dropped almost 8pc. On Tuesday, the Irish
market saw €3.2bn of its value disappear. The Irish market
is now down 31pc in the past 12 months.
Unlike last year, international markets have also made
massive losses so far this year.
Mr Collins calculated that in the first two weeks of
2008, a total of €4bn has been wiped off the €110bn in
private Irish pension funds.
"The losses have been across the board and not just in
Irish equities, which was the case last year. Markets in
Europe, the UK and the US have fallen between 6pc and 7pc in
the past fortnight," Mr Collins said.
The Mercer consultant said the turmoil in the stock
markets globally was very hard for pension trustees to
defend against.
Risks
"It seems obvious, but pension fund trustees need to be
aware of the risks from equities. If they have equity funds,
they may need to be more diversified," he added.
Fund managers and trustees suffering losses could lessen
their dependence on equities by diversifying into investment
in private equity, emerging markets and infrastructure
projects, along with bonds.
The huge losses being suffered by pension funds are
expected to put further pressure on companies to close down
final salary or defined benefit pension funds and replace
them with defined contribution funds where the employees
take the risk, according to Peter Griffin, of pension
consultants Allied Pension Trustees.
Mr Griffin advised those contributing to pensions and
trustees to ride out the current turmoil, particularly if
they have more than five years left before they retire.
 The Irish Times reports that Payzone chief executive John Nagle and chief financial officer
John Williamson secured injunctions in the High Court in Dublin
yesterday preventing the recently formed electronic payments
group from dismissing them from their posts.
This followed an
announcement to the stock exchange by Payzone yesterday morning
stating that the two Dublin-based executives had left the
company.
Chairman Bob Thian assumed "executive responsibility" at the
company with "immediate effect", the statement said.
"John Nagle and John Williamson have created a strong
platform for growth at Payzone but the company has now reached a
stage of its development where a different set of skills is
required.
"There are a number of excellent managers at Payzone and I
look forward to working with them to realise the great potential
of this business," Mr Thian stated.
Mr Nagle and Mr Williamson went before the High Court at
5.15pm yesterday and were granted three injunctions by Mr
Justice George Birmingham.
These restrain Payzone from treating the two executives as
being dismissed from their employment and as "having been
removed" as directors.
A third injunction was secured restraining Payzone from
announcing that the pair had been dismissed or removed as
directors.
A full hearing in the High Court is due to be held this
morning although legal sources indicated that this could be
deferred.
A spokesman for Payzone said it had "no comment to make on
the legal proceedings".
He added that the decision to remove Mr Nagle and Mr
Williamson was a unanimous one taken by the board and supported
by the majority of shareholders.
It is understood that Mr Nagle was informed of the decision
to remove him from his position by email on Tuesday night.
Mr Nagle and Mr Williamson told the court that a board
meeting held on Tuesday, at which the decision was taken to
terminate their employments, was not properly convened.
Under the company's own rules, board meetings are supposed to
be held in the Republic, where the company's head office is
situated.
It is understood that the meeting took place in Britain.
In addition, they told the court that that their contracts
state that they should receive 12 calendar months' written
notice of their employments being ended, which has not happened.
The row is believed to centre around the release of a trading
update to the stock market.
Payzone was formed on December 5th from the merger of Irish
e-payments group Alphyra, which Mr Nagle founded, and
British-based ATM operator Cardpoint, which Mr Thian, as
executive chairman, led.
It listed on the Alternative Investment Market (Aim) in
London.
It is understood that Cardpoint had experienced difficult
trading in October and November while Alphyra's business grew.
Mr Nagle is believed to have wanted to issue a trading
statement to the stock market in advance of an investor roadshow
this week but the board decided against this move.
As a result, Mr Nagle is believed to have declined to
participate in the roadshow.
The Irish Times also reports that the troubles of cider makers C&C spilled over from summer into
the winter market, with a 30 per cent fall in sales of Magners,
prompting a slide in its share price early yesterday.
The
drinks group's 15 per cent fall in total revenue between
September and November, and indication that sales over the
Christmas period were similarly subdued, prompted a 17.5 per
cent decline in its share price. But in a day of trading on the
Iseq index that proved to be as volatile as C&C's own earnings
performance of late, the stock recovered almost all of those
losses and closed down just 1 per cent.
Despite being the same drink, with the same ingredients and
same taste, C&C's Bulmers and Magners cider produced starkly
different results for the group in the final few months of 2007.
Bulmers, C&C's cider brand in Ireland, posted a relatively
strong year-on-year sales growth of 2 per cent. However, the 30
per cent year-on-year drop in sales of Magners, the name given
to the brand in Britain, resulted in an overall 18 per cent dip
in the cider division's revenues.
C&C's fears that the summer downpours would have a knock-on
effect on winter sales - because of a failure to recruit new
drinkers during the peak summer season - appear to have been
realised.
In its trading statement, C&C also blamed a loss of market
share to Scottish & Newcastle, owners of rival British brand
Bulmers Original, and a "very weak" environment for pubs and
bars.
C&C plans to appoint a managing director to oversee the
development of Magners in Britain, which is still seen as its
main market for growth potential. C&C expects to report a 10 per
cent decline in revenues for its current financial year, which
ends on February 29th. Its only real interest, apart from cider,
is its spirits and liqueurs division, which recorded growth of 1
per cent in the third quarter.
There was heavy trading in the stock yesterday, with 5.4
million shares exchanging hands. C&C said it would shortly
resume its share buyback scheme.
NCB stockbrokers said it was downgrading the stock from "buy"
to "hold" until the group's strategy for stabilising its
business in Britain became clearer.
But Goodbody stockbrokers food analyst Liam Igoe, retaining
his "buy" recommendation, said C&C's current share price was
"effectively writing off the value of the Magners brand".
 The Irish Examiner reports that
pessimism among Irish construction firms has
reached its highest level ever, ending a dismal week for the sector.
The latest FÁS/ESRI employment and vacancies survey
found the employment outlook of construction firms dropped to it lowest level
last month, with the percentage of employers in the sector expecting employment
levels to fall over the coming months 42 percentage points higher than that
predicting an increase.
Earlier this week, the Ulster Bank construction
purchasing managers index found activity in the construction sector has plunged
to its lowest level on record, while the CSO said the number of people employed
in the construction sector fell 5.4% on a year-on-year basis in November.
The FÁS/ESRI survey also found the number of firms expecting a fall in
employment levels over the coming months is 10 percentage points higher than
that predicting an increase.
The three-month moving average, which took the average figure of firms expecting
a fall in employment levels in October, November and December fell to -10%, the
lowest since the survey began in May 2002.
There was positive news on the vacancies front with economy-wide vacancies
decreasing slightly in December by two percentage points to 14%, a fall driven
by a decline in reported vacancies across the four sectors surveyed —
construction, industry, retail and services.
Dr Elish Kelly of the ESRI said: “Overall the vacancy figures are holding up
but going forward we are finding employers are expecting to hire less people and
are becoming more pessimistic when it comes to hiring prospects but this seems
to be consistent with overall forecasts for economic growth.
“With regards to the construction sector, the results from December’s survey
indicate employers in this sector are the most pessimistic they have been since
2002 about future employment levels in the sector.”
The survey also found vacancies in the industry sector fell from 16% in November
to 11% in December. This time last year the vacancy rate stood at 17%.
The percentage of firms reporting vacancies in the retail and services sectors
declined, to 1% and 21% respectively.
Industry employment expectations fell by 9 percentage points to –22% last month.
The employment outlook of retail sector firms continued to trend downwards with
employment expectations for the sector falling by one percentage point to -6%.
Some of the most frequently reported difficult-to-fill vacancies were quantity
surveyors, engineers and general operatives and sales staff.
The Financial Times reports that the euro slid sharply on Wednesday after
investors bet comments by a European
Central Bank council member meant
eurozone rate cuts were more likely.
Yves Mersch, Luxembourg’s central bank
governor, said the ECB should “be
cautious” amid the widespread economic
uncertainty and hinted that eurozone
growth forecasts might soon have to be
revised downwards.
Mr Mersch represents one of the
eurozone’s smallest states, but he is
regarded as one of the more hawkish
members of the 21-strong ECB council.
His comments in a Bloomberg interview
suggest at least some bank members are
moderating their tone as the US Federal
Reserve prepares to cut interest rates.
Earlier, Axel Weber, president of the
Bundesbank, also appeared to be hedging
his usually hawkish stance. He
acknowledged that German inflation could
have eased significantly by 2009.
Eurozone inflation was confirmed at
3.1 per cent. The ECB’s target range is
a rate “below but close” to 2 per cent.
Jean-Claude Trichet, ECB president,
last week warned he was prepared to act
“pre-emptively” to prevent wage demands
fuelling long-term inflationary
pressures, a hint that interest rates
could even rise. In Frankfurt on
Wednesday night, last night, Mr Trichet
said the ECB’s position had not changed.
The euro briefly dived below $1.46.
It had closed on Tuesday at $1.4850.
Global equity markets continued to
suffer from fears of a US recession. The
FTSE Eurofirst 300 index had its lowest
close in 16 months and the FTSE 100
ended below 6,000 for the first time
since August. Hong Kong suffered its
worst one-day fall since September 2001,
though Wall Street had recovered from an
early slide by midday.
The FT also reports that Josef Ackermann, chief executive of
Deutsche Bank, has called for a
thorough overhaul of the operations of
investment banks and regulators to
combat a widespread loss of investor
confidence in complex finance.
Banks
needed to find ways of making complex
structured products, such as mortgage
securities, far more transparent, thus
reducing investors’ dependency on credit
ratings, Mr Ackermann said.
“Improved transparency is decisive,
including disclosure of
off-balance-sheet exposures, such as
structured investment vehicles,” Mr
Ackermann said in a private speech to
the London School of Economics this
week. Deutsche Bank is now circulating
the speech to key clients and
regulators.
Regulators had to shift from their
emphasis on regulatory capital issues to
a more “holistic” approach that also
monitored banks’ liquidity positions.
“In the early 1930s, the SEC restored
confidence in markets by providing
transparency on share prices ... sound
pricing infrastructure needs to be
developed [for complex] new products,”
said Mr Ackermann.
The comments are some of the most
outspoken calls for reform made by a
senior banker. But Mr Ackermann’s
remarks reflect an intensifying debate
behind the scenes between policymakers
and bankers about how best to respond to
the credit squeeze.
These discussions are likely to
intensify next week when regulators,
bankers and world leaders gather for the
World Economic Forum in Davos, not least
because central bankers and regulators
are expected to issue calls for policy
reform in the spring.
Some Wall Street and City bankers
fear the mounting toll of losses linked
to subprime-linked securities and other
debt will soon prompt US politicians and
regulators to clamp down on complex
finance.
However, bankers such as Mr Ackermann
hope this can be avoided if the industry
is seen to reform itself. In another
sign of this looming fight, the
Securities Industry and Financial
Markets Association – the body that
represents the global structured finance
sector – on Wednesday appointed T
Timothy Ryan, a senior JPMorgan banker
and former US regulator, as its new
chief.
Mr Ryan, a considerably more
heavyweight candidate than his
predecessors, is expected to lead a big
banking initiative to lobby politicians
and regulators in defence of the sector.
The New York Times reports that
Ben S. Bernanke, chairman of the Federal Reserve, has told lawmakers
that he can support tax cuts or spending measures to stimulate the economy,
even if they increase the budget deficit, provided the measures are quick
and temporary.
Mr. Bernanke is to testify before the House Budget Committee Thursday.
Democratic lawmakers said he had told them that he would not comment on
proposals to link a stimulus package with a permanent extension of President
Bush’s tax cuts. That is expected to disappoint Republicans who favor such a
link.
Faced with growing evidence that the economy is slipping into a
recession, Congressional Democrats and President Bush are trying to come up
with a package that would put more money in Americans’ hands within the next
few months.
The Fed’s willingness to give a nod to fiscal stimulus is important. Many
lawmakers will not support action without the chairman’s blessing, and the
double dose of stimulus that the Fed and Congress are considering must be
carefully calibrated.
If Mr. Bernanke opposed Congressional action on the ground that spending
increases and tax cuts would increase the budget deficit, the Fed might
restrain its own effort to stimulate the economy with lower interest rates.
Mr. Bernanke wants to keep the Fed out of political jockeying, but he is
also wary of endorsing measures that could aggravate the government’s
long-term fiscal problems. Unlike his predecessor,
Alan Greenspan, Mr. Bernanke has generally refused to insert himself
into the particulars of partisan battles over specific tax and spending
proposals. Mr. Greenspan was often criticized for endorsing Mr. Bush’s tax
cuts of 2001, which contributed to ballooning deficits for several years.
Democratic lawmakers who have spoken with Mr. Bernanke said he would not
endorse any specific plan but supported the general idea of propping up
consumer spending and investment with temporary tax or spending measures.
Senator
Charles E. Schumer, Democrat of New York and chairman of the Joint
Economic Committee, said Mr. Bernanke was “generally supportive” of a
stimulus package as long as it was well conceived. “He said that while he
wasn’t going to endorse a specific plan, if an economic stimulus package was
properly designed and enacted so that it enters the economy quickly, it
could have a very positive effect,” Mr. Schumer said.
Mr. Bernanke acknowledged last week that economic conditions had worsened
and strongly suggested that the Federal Reserve would reduce the benchmark
interest rate at the meeting of its Federal Open Market Committee on Jan.
30. On Wall Street, investors are betting that the central bank will reduce
overnight lending rates to 3.75 percent from 4.25 percent.
On Wednesday, the central bank released its so-called beige book, a
compilation of anecdotal reports from the Fed’s 12 regional banks, and it
stated that economic growth slowed noticeably in November and December.
The report said that holiday-season retail sales were “generally
disappointing.” Seven of the 12 Fed districts reported a “slight increase in
economic activity,” two described conditions as “mixed” and three reported
slowdowns.
The Fed chairman met privately on Monday with the House speaker,
Nancy Pelosi of California. In that meeting, according to Congressional
officials, Mr. Bernanke neither urged Congress to enact an emergency measure
nor signaled any opposition.
While declining to discuss details, Ms. Pelosi said, “I am encouraged by
my conversations with the administration and the Fed, which is separate and
independent, that there is a sense of urgency, that there is a need for a
stimulus package and we should find our common ground as soon as possible.”
The Fed chairman was said by others to have echoed the concept if not the
precise words of economists like
Lawrence H. Summers, Treasury secretary under President
Bill Clinton, who have called for any plan to be “timely, targeted and
temporary.”
Democratic lawmakers generally favor measures aimed at low- and
middle-income families, arguing they need the extra money most acutely and
are most likely to spend it immediately. Though Democrats are weighing a
variety of measures, a consensus appears to be building that the package
should cost about $100 billion.
Among the proposals circulating among Democrats are one-time tax rebates
to almost all workers; temporary increases in unemployment benefits, food
stamps and
Medicaid payments; and federal grants to state and local governments.
Some Democrats are pushing for increased spending on public infrastructure
like highways and bridges, but aides to Ms. Pelosi said that issue might be
dealt with separately to avoid slowing down any stimulus package.
Administration officials and many Republican lawmakers were open to tax
rebates, but many want to include temporary business tax breaks, like an
investment tax credit or permanent reductions in the corporate rate.
The House Democratic and Republican leaders met Wednesday and emerged
promising to work together on a stimulus plan. Congressional leaders are to
meet with Mr. Bush next Tuesday.
On Wednesday,
Michael O. Leavitt, the secretary of health and human services, rejected
a proposal favored by many Democrats to have the federal government pay a
larger share of the cost of Medicaid, the health program for low-income
people that is financed jointly with the states.
He said that increasing the federal share of Medicaid could be a means of
increasing federal control over health care, a change opposed by the White
House.
“I don’t think that
Medicare and Medicaid were intended as jobs programs,” Mr. Leavitt said.
“They were intended to help those with serious economic disadvantages.”
One precedent for this proposal was the 2003 tax cut law, which provided
$20 billion in “temporary fiscal relief” to states. Half of the money was to
avert cuts in Medicaid programs.
Mr. Bush and his advisers have been pushing for years to make his 2001
and 2003 tax cuts permanent. Many economists argue that making the tax cuts
permanent would have no immediate effect on the economy, because they are
not scheduled to expire until the end of 2010. But supporters say the move
could provide a short-term lift because investors would have greater
certainty about tax policy in the future.
Mr. Bernanke, who was a Fed governor and then chairman of Mr. Bush’s
Council of Economic Advisers before becoming Fed chairman, is expected
to rebuff efforts by Republicans or Democrats to draw him into that battle.
Since becoming Fed chairman in February 2006, Mr. Bernanke has generally
refused to comment on specific tax and spending proposals unless they had a
direct bearing on the overall economy.
“If he gets peppered on these issues, my guess is that he will duck,”
said Brian A. Bethune, an economist at Global Insight, an economic
forecasting firm.
Mr. Bernanke is expected to warn lawmakers Thursday that the nation faces
severe budget problems in the decades ahead as more than 70 million baby
boomers reach retirement age.
He has long made it clear that there are times when it makes sense for
the federal government to run higher deficits to head off an economic
downturn.
“In the short run, fiscal policy makers may have important and legitimate
reasons to depart from budget balance, sometimes even substantially,” Mr.
Bernanke said in a speech in 2003, when he was a Fed governor. Those
reasons, he continued, could include a national emergency or “a stimulus
package to assist economic recovery.”
The NYT also reports that for decades, the theory that lowering
cholesterol is always beneficial has been a core
principle of cardiology. It has been accepted by doctors
and used by drug makers to win quick approval for new
medicines to reduce cholesterol.
But now some
prominent cardiologists say the results of two recent
clinical trials have raised serious questions about that
theory — and the value of two widely used
cholesterol-lowering medicines, Zetia and its sister
drug, Vytorin. Other new cholesterol-fighting drugs,
including one that
Merck hopes to begin selling this year, may also
require closer scrutiny, they say.
“The idea that you’re just going to lower LDL and
people are going to get better, that’s too simplistic,
much too simplistic,” said Dr. Eric J. Topol, a
cardiologist and director of the Scripps Translational
Science Institute in La Jolla, Calif. LDL, or
low-density lipoprotein, is the so-called bad
cholesterol, in contrast to
high-density lipoprotein, or HDL.
For patients and drug companies, the stakes are
enormous. Led by best sellers like
Lipitor from
Pfizer, cholesterol-lowering medicines, taken by
tens of millions of patients daily, are the largest drug
category worldwide, with annual sales of $40 billion.
Despite widespread use of the drugs, though, heart
disease remains the biggest killer in the United States
and other industrialized nations, and many people still
have cholesterol levels far higher than doctors
recommend.
As a result, drug companies are investing billions of
dollars in experimental new cholesterol-lowering
medicines that may eventually be used alongside the
existing drugs. If the new questions result in slower
approvals, it would be yet another handicap for the drug
industry.
Because the link between excessive LDL cholesterol
and cardiovascular disease has been so widely accepted,
the
Food and Drug Administration generally has not
required drug companies to prove that cholesterol
medicines actually reduce heart attacks before approval.
They have not had to conduct so-called outcome or
events trials beforehand, which are expensive studies
that involve thousands of patients and track whether
episodes like heart attacks are reduced.
So far, proof that a drug lowers LDL cholesterol has
generally been enough to lead to approval. Only then
does the drug’s maker begin an events trial. And until
the results of that trial are available, a process that
can take several years, doctors and patients must accept
the medicine’s benefits largely on faith.
“You’ve got a huge chasm between F.D.A. licensure
and a clinical events trial,” said Dr. Allen J.
Taylor, the chief of cardiology at
Walter Reed Army Medical Center.
Nonetheless, the multistep process has worked well
for several cholesterol drugs — including Lipitor and
Zocor, which are in a class of drugs known as
statins. In those cases, the postapproval trials
confirmed that the drugs reduce heart attacks and
strokes, adding to confidence about the link between
cholesterol and heart disease.
Doctors generally believe that the amount by which
cholesterol is lowered, not the method of lowering it,
is what matters.
That continues to be the assumption of Dr. Scott M.
Grundy, a professor of medicine at the University of
Texas Southwestern Medical Center who was the chairman
of a panel in 2001 that set national guidelines for
cholesterol treatment.
“LDL lowering, however it occurs, delays
development of coronary
atherosclerosis and reduces risk for
heart attack,” Dr. Grundy said this week. In
atherosclerosis, plaque builds up in the arteries,
eventually leading to blood clots and other problems
that cause heart attacks and strokes.
In the last 13 months, however, the failures of two
important clinical trials have thrown that hypothesis
into question.
First, Pfizer stopped development of its experimental
cholesterol drug torcetrapib in December 2006, when a
trial involving 15,000 patients showed that the medicine
caused heart attacks and strokes. That trial — somewhat
unusual in that it was conducted before Pfizer sought
F.D.A. approval — also showed that torcetrapib lowered
LDL cholesterol while raising HDL, or good cholesterol.
Torcetrapib’s failure, Dr. Taylor said, shows that
lowering cholesterol alone does not prove a drug will
benefit patients.
Then, on Monday, Merck and
Schering-Plough announced that Vytorin, which
combines Zetia with Zocor, had failed to reduce the
growth of fatty arterial plaque in a trial of 720
patients. In fact, patients taking Vytorin actually had
more plaque growth than those who took Zocor alone.
Despite those drawbacks, that trial, called Enhance,
also showed that patients on Vytorin had lower LDL
levels than those on Zocor alone. For the second time in
just over a year, a clinical trial found that LDL
reduction did not translate into measurable medical
benefits.
The Enhance trial was not an events trial and was not
intended to study whether Zetia or Vytorin were
effective at reducing heart attacks. But the growth of
fatty plaque is closely correlated with heart attacks
and strokes.
Without data from events trials for Zetia and Vytorin,
no one can be certain if the drugs help or hurt
patients. But Merck and Schering did not begin an events
trial for the drugs until 2006, nearly four years after
the F.D.A. approved Zetia. That trial will not be
completed until 2011.
Dr. Robert M. Califf, the vice chancellor for
clinical research at
Duke University, and a co-lead investigator on the
Zetia trial still under way, said companies should have
started the trials more quickly. “Outcome trials
ought to start when you know you’re going to get on the
market,” he said.
On Tuesday, the
American Heart Association called for the Zetia
outcome trial to be completed as quickly as possible.
Merck has asked the F.D.A. to approve its drug
Cordaptive, which raises HDL cholesterol and lowers LDL,
without waiting for the results of an events trial.
Merck has begun an events trial for Cordaptive, but data
will not be available until 2013.
Merck has submitted the application for Cordaptive
and has said it expects an answer from the F.D.A. before
July. Doctors, patients and the drug industry will be
waiting to see whether regulators are still willing to
accept the theory that lower cholesterol is always a
good thing. |
