Herb Schedule

Note From L:loyd:

Schering Plough is the maker of Peg Intron and intron A.

I have been looking for weeks to find a news story stating all the items that they cheated on but I can not.

Receiving the largest fine in history, 500.000.000 leads me to beleive that they must have killed a lot of people.

We will never know!

Tuesday January 15 03:11 PM EST
At Schering, Optimism and Problems
By MELODY PETERSEN The New York Times

To hear Schering-Plough executives tell it, the future is bright. But to many others, the pharmaceutical giant's prospects are less certain.  Pharmacies nationwide are stocked with Clarinex, the company's new allergy drug. Schering-Plough is optimistic that Clarinex will be as big a blockbuster as Claritin, its existing allergy medication and by far its most important product. And the company is near an agreement with regulators to resolve longstanding problems manufacturing the medicines it sells.

Schering-Plough's chief executive, Richard Jay Kogan, predicted last month that "2001 will be seen as a watershed year, when this company undertook important changes to remake itself."

But to many others, Schering-Plough's prospects are less certain. The company is facing a possible record government fine for quality control problems in its factories. Many drug industry experts are not convinced that Clarinex is a better drug than Claritin, which it is supposed to replace. And with its stock roughly 30 percent lower than it was a year ag! o, Schering- Plough is periodically mentioned as a takeover candidate.

This year "will be a challenging year for Schering-Plough, and 2003 could be even more so," said Hemant K. Shah, an independent drug industry analyst in Warren, N.J.

Schering-Plough's troubles began in 1998, although at the time, few investors knew.

The company's sales of Claritin were soaring as it spent $137 million to advertise the drug, according to Competitive Media Reporting more than any other company was spending on a single medicine. Schering-Plough's Claritin ads, among the first to take advantage of the loosening of restrictions on pharmaceutical advertising, became ubiquitous, showing up on television, in magazines, subway cars and even paper bags from pharmacies.

But federal regulators issued three warning letters to Schering- Plough that year, detailing widespread problems in factories in New Jersey, Puerto Rico and Ireland.

During the next three years, the compan! y received two more warning letters about similar manufacturing problems, recalled several defective medicines, and was told by consultants it hired, according to an internal report later made public, that some parts of its factory in Kenilworth, N.J., were "out of control."

Over the last several years, hundreds of consumers, according to federal documents, have complained that the company's bottles of Nasonex, a nasal spray, did not work. And a Food and Drug Administration official said in an interview last summer that the agency was investigating whether patients might have died after Schering-Plough shipped asthma inhalers that contained little or none of the medicine that would have helped them breathe during an attack. The company says there is no evidence that ties any deaths to its products and that it has done nothing wrong.

After holding up approval of Clarinex because of the factory problems, the F.D.A. approved the drug late last month but at a high pric! e. The company said it expected to pay a fine of up to $500 million to the government for its protracted manufacturing problems, five times the highest penalty a drug company has paid for such violations. Apart from the fine, Schering-Plough has spent more than $60 million to clean up its manufacturing problems, and is adding about 500 employees to its factory payrolls, many of them specializing in quality control.

Schering-Plough needs to keep sales increasing to pay for the manufacturing problems, particularly since it has not reserved money to pay the possible fines. But the company is more dependent on a single product Claritin than almost any other major drug manufacturer.

Sales of all forms of Claritin accounted for 49 percent of Schering- Plough's retail pharmaceutical sales in the United States in the twelve months ended last November, according to Scott-Levin, a consulting firm, and 34 percent of total worldwide sales in the first nine months of 2001, acco! rding to the company. The company now needs to switch patients from Claritin to Clarinex before the main patent on Claritin expires at the end of year, which will allow other companies to sell generic versions.

Late last month, in an attempt to stimulate sales of Clarinex, the company said the price of the new drug would be 18 percent below Claritin's. But there have been no studies so far comparing Clarinex and Claritin, and few drug industry experts say that Clarinex offers significant advantages over the older medicine.

"Claritin is already a very safe and effective drug," Mr. Shah said. "Not all drugs can be improved. Unless you can tell the consumer that this is a better drug, it will be difficult to get them to switch."

Mr. Shah expects Clarinex to sell well this year, perhaps reaching $700 million in sales. But he expects sales of both Clarinex and Claritin to then fall sharply when the Claritin patent expires, he said. Profits would follow suit, parti! cularly if Schering-Plough finds that it has to cut prices sharply to compete with the new generics.

Mr. Shah and other Wall Street analysts say the company's stock down more than 30 percent from a year ago could fall even further. Several investment bankers said that some of their clients had already looked at Schering-Plough as a possible takeover target, but the bankers were not aware of active merger discussions.

Top executives at Schering- Plough, which has its headquarters in Kenilworth, declined requests for interviews. But William O'Donnell, a Schering-Plough spokesman, said the company believed that it would be able "to establish Clarinex as an important new therapy."

The company's clinical trials have shown, Mr. O'Donnell said, that patients' allergy symptoms were reduced 24 hours after taking Clarinex.

"We believe this means patients can wake up and enjoy 24 hours of nondrowsy seasonal allergy relief," he said.

Advertisements for Clari! tin, however, also promote it as a "once a day" drug.

Mr. O'Donnell said Schering- Plough expected its earnings to grow this year by the "low double-digits."

Schering-Plough is working closely with the F.D.A. to resolve the manufacturing issues, he said, although the final terms of the settlement agreement with the government are still unclear.

The company does not talk, Mr. O'Donnell said, about merger or takeover speculations.

Schering-Plough is determined not to let its sales slip away. Mr. Kogan told analysts last summer that the company would "be very aggressive" in marketing Clarinex, once it was approved.

Mr. Kogan also said at the time that the company did not plan to let generic companies start selling Claritin when the product's main patent expires in December.

The company has secondary patents on Claritin that extend beyond 2002, Mr. Kogan said. "We will defend our patents vigorously,"

he added. The company has spent million! s of dollars lobbying in Washington in recent years, trying to get lawmakers to pass legislation that would extend the expiration date of Claritin's patent because they say the drug's approval was held up for too long at the F.D.A. But so far, those attempts have failed.

Dr. Leonard S. Yaffe, an industry analyst for Banc of America Securities, said he was expecting a generic version of Claritin to hit pharmacy shelves in December, when the first patent on the drug expires. And he expects the decline of Claritin and Clarinex sales to be very sharp, similar to the decline in sales of the antidepressant Prozac, which lost its patent protection last summer. Eli Lilly's sales of that drug fell more than 70 percent within three months after Barr Laboratories, a maker of generic drugs, began selling a lower- priced version of the drug.

Schering-Plough has been an aggressive marketer of many of its drugs.

Last year, the Federal Trade Commission charged Schering-Plou! gh with paying two generic drug makers not to sell cheap versions of K- Dur 20, a potassium chloride supplement made by Schering-Plough. The company is vigorously contesting the government's allegations.

In addition, in the last couple of years, many patients with hepatitis C have complained about Schering- Plough's marketing of two expensive treatments. The company bundled the two drugs together, charging about $18,000 for the needed year's worth of treatment and refusing to sell one without the other.

Schering-Plough argued that for safety reasons, the drugs should only be taken together, but patients who had wanted to take one of the drugs in combination with another company's drug disagreed.

"They have coerced patients into buying both products," said Brian D. Klein, co-founder of the Hepatitis C Action and Advocacy Coalition, a patient group. "They have not made many friends through their marketing tactics."

Schering-Plough has several promising d! rugs in its research pipeline, which could eventually help offset a decline in Claritin sales.

Asmanex, a promising new asthma drug, could be approved by the F.D.A. this year. Dr. Yaffe said maximum annual sales of Asmanex could reach more than $1 billion.

Schering-Plough and Merck also recently teamed up to file for approval of Zetia, a new type of cholesterol drug.

But the new drugs, Dr. Yaffe said, will not begin lifting revenue significantly until 2004.