8 min readAn Ode to Pharmacovigilance Solutions
Despite all these constraints the pharma companies continuously come out with new products. Surveillance of the safety of the product over its life on the market is very important in the first five years of a new drug as the long term side effects are often unknown. Even though clinical studies have verified the efficacy and the safety of the product there are some potential limitations. These limitations are due to confined sample sizes, stringent exclusion criteria, and rare adverse events as well as other unpredictable conditions after marketing such as off-label use, use in previously untested populations and so forth. Thus, the complete safety profile of a drug will not usually be available until a product is exposed to a sufficiently large population in the post-marketing phase.
The famous thalidomide disaster in the early 1960’s forced pharmaceutical companies to start monitoring and reporting spontaneous adverse reactions to their products to a number of regulatory authorities like Food & Drug Authority (FDA) and European Medicine Agency (EMEA). The pharma companies are required to collect data on adverse events, assess the seriousness of the events and report the various cases on a regular basis to the regulators. As a result of these established reporting practices some significant adverse reactions to currently marketed products were observed which were not seen during clinical testing which eventually resulted in those products being withdrawn from the market. The withdrawal of a product from the market would prove to be extremely costly in terms of litigation expenses, lost revenue, falling share price, and tarnished company image. There has been an instance when a company was recently asked by the courts to pay $1.0 billion for a single product-related death.
Major product withdrawals from the market have resulted in litigation settlements worth up to $5.0 billion. Following a major product withdrawal a company’s market capitalization can fall by a couple of billion dollars in a few months. Most recently the withdrawal of Vioxx resulted in a reduction in the company’s market capitalization of $27 billion3 overnight, the loss of $2.5 billion in annual sales, and potential legal liabilities of up to $10 billion4. In short, a product withdrawal can result in a major damage to the company’s goodwill and loss of tremendous value to its shareholders.