Merck's $4 billion PR problem
A vaccine to prevent cervical cancer looks set to be a blockbuster -- but resistance from parents and patient advocates could trip it up.
By John Simons, FORTUNE writer

NEW YORK (FORTUNE) - Merck has already angered Christian conservatives by pushing to make its yet-to-be approved cervical cancer vaccine, Gardasil, mandatory for girls as young as nine. But that could be the least of the company's worries regarding the projected $4 billion-a-year vaccine.

More mainstream resistance from parents and patient advocates could emerge as the medicine's FDA approval draws closer.

FORTUNE 500 companies are becoming more open about executive pay, product safety and environmental impact. But many still resist pressure to disclose campaign donations. (Read the column)

Merck's Gardasil, a vaccine designed to prevent the sexually-transmitted human papillomavirus (HPV), is in its final stages of FDA review and could receive the agency's blessing as soon as June 8th. In May, a federal advisory panel unanimously recommended the agency approve the vaccine to combat HPV - a virus that can lead to cervical cancer.

Merck (Research) is appealing to states to make the vaccine mandatory for all children who attend public schools. A mandate from the states, which control vaccination policies, would make Gardasil a guaranteed blockbuster.

That's crucial for the nation's fourth-largest drugmaker, which is still struggling to replace revenues lost after the 2004 withdrawal of its blockbuster arthritis medicine, Vioxx, in addition to shrinking sales of its cholesterol drug Zocor, as it faces generic competition this summer.

Gardasil is almost certain to be approved by the FDA, say analysts, who place the medicine's annual peak revenue potential in the $2 to $4 billion range. Those estimates assume states will make Gardasil mandatory. The shots are given three times over a six month period, and will cost anywhere between $300 and $500. The vaccine lasts for up to five years.

Merck's strongest data point: Studies that show the vaccine to be 100 percent effective against strains of HPV, which are responsible for some 70 percent of cervical cancers. In the United States, 14,000 women are diagnosed with cervical cancer each year, and 3,900 die from it, according the U.S. Centers for Disease Control.

Inoculating pre-adolescent girls for a sexually-transmitted virus raises concerns for many parents - not just Christian conservatives. A survey of 1,600 mothers and fathers published in the journal Pediatrics found that 35 percent are against having their child inoculated.

Is it necessary?

Barbara Loe Fisher, president and co-founder of the National Vaccine Information Center, questions the need for a mandatory HPV vaccine in the United States, where most women receive regular annual pap smear exams.

Those exams usually catch HPV early, before it develops into cancer. As a result of pap smear campaigns, Fisher observes, the instance of cervical cancer fell 74 percent between 1955 and 1992.

Fisher says mainstream parental opposition to Gardasil is easy to explain. "Parents are becoming more concerned about the shear number of vaccines kids are getting these days," she says. "In the 1980s, U.S. children got 23 doses of seven vaccines by age six. Today, they get 48 doses of 14 vaccines in the same period."

"And during the time that vaccines doses have doubled," she says, "there's been an increase in the number of children with autism, attention deficit and hyperactive disorder, learning disabilities, asthma, and diabetes, in which vaccines could be a contributing factor."

Fisher is strongly opposed to Merck's proposals to inoculate girls at age 9, which is six years before the average age of first sexual experience in the United States "It's just profit-making on the backs of 9-year-old girls," charges Fisher.

The proposal has also drawn widely publicized ire from groups like the Family Research Council and Focus on the Family, both Christian conservative organizations generally opposed to anything they believe promotes premarital sex.

Merck insists it has good reason to start young. "The best time to administer any preventative vaccine is before individuals are exposed to the virus in question. Additionally, preteens have very robust immune responses to vaccines," says Merck spokesperson, Kelley Dougherty.

Requirements that students get a vaccine to enroll in school, says Merck's Dougherty, "have proven effective in preventing infectious diseases and help to decrease racial and ethnic disparities in vaccine utilization."

Before states make Gardasil mandatory, a committee at the Centers for Disease Control needs to give its own go-ahead. That committee is scheduled to meet on June 29.

In addition, the American Academy of Pediatricians would need to recommend to doctors that they add Gardasil to the battery of vaccines already administered to U.S. schoolchildren. From there, each U.S. state would have to decide whether to make Gardasil compulsory for school children. Top of page

YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.