Star Drug Prozac Becomes Lilly Liability
Prozac, a depression remedy that has been a star performer for pharmaceuticals giant Eli Lilly & Co., has turned into a sudden liability in the wake of recent lawsuits targeting the drug.
Though Indianapolis-based Lilly defends the safety of Prozac, noting that more than 2 million people have taken the prescription drug, analysts worry about the effect of negative news on a drug that is becoming increasingly important to Lilly.
Two suits filed in the last two weeks blame Prozac for inducing violent thoughts in a New York woman, who slashed herself hundreds of times, and in a Kentucky man, who shot and killed seven people and wounded 13 others before killing himself at a printing plant in Louisville last year.
As a result, Lilly, whose sales and earnings have been rising partly on the strength of Prozac, has been taking a beating on Wall Street. The stock dropped $4.375 on Thursday.
Before the suits hit the headlines, Lilly’s stock had been moving up. It closed at $88.50 on July 16, the day before the first suit was filed.
Lilly’s shares inched up 87.5 cents in heavy trading Friday to close at $80.50 on the New York Stock Exchange, while the Dow Jones industrial average fell 22.28 points. Slightly more than 1.9 million shares traded, making Lilly the seventh most actively traded stock on the exchange.
“I view the lawsuits themselves as a non-event. . . . There really is no scientific basis for the complaint. People who are depressed are suicidal anyway,” said Rita Freedman, an analyst with Provident National Bank in Philadelphia.
However, she said, the issue of concern to Lilly is the possibility of additional lawsuits and more “negative publicity” about a drug that is very important to the company financially.
Freedman estimated that sales from the drug have already reached about $385 million this year, compared to about $350 million for all of last year. Analysts expect Prozac sales to top $650 million this year and to hit $1 billion in 1991.
“It is indeed nail-biting time (for Lilly) because you just don’t know what eventually will happen” in the political arena and before a jury, said Viren Mehta, partner in Mehta & Isaly, a New York-based pharmaceutical research group.
“But at the moment there is no reason to believe that there is anything wrong with the way Prozac works or the way Eli Lilly has marketed Prozac,” he said.
Added Richard R. Stover, an analyst with the Alex. Brown & Sons brokerage firm, “There definitely is a concern that patients who can truly benefit from the drug could be scared away from continuing to use it, or some physicians may be scared away from prescribing it.”
A Lilly spokesman could not be reached for comment Friday, but the company said in a statement that the murderer in the Kentucky case, Joseph Wesbecker, “had a lengthy history of psychiatric disturbance, including suicide attempts and homicidal threats prior to taking Prozac. It would not appear that Prozac caused this behavior.”
Since it was introduced in December, 1987, sales of Prozac have soared because it has fewer side effects than drugs previously available. It was the subject of favorable cover stories in Newsweek and New York magazines, and the National Enquirer called it a “wonder drug.”
But there have been complaints, most notably in an article last February in the American Journal of Psychiatry. Author Martin Teicher, a research psychiatrist at Harvard University, discussed six patients who developed intense and violent thoughts of suicide while taking Prozac.
The Church of Scientology, through its affiliate, the Citizens Commission on Human Rights, on Wednesday sent a letter to Rep. John Dingell, chairman of the House Energy and Commerce Committee, calling for an investigation of Prozac and a recall of the drug. Scientology, whose members often wear shirts reading “Psychiatry Kills,” has long campaigned against psychiatric drugs.
A spokesman for Dingell said the committee is not investigating Prozac.
