Examining The AHA-Pfizer Torcetrapib Flap
Each year, tens of thousands of physicians, marketers, pharmaceutical company executives and others descend on the annual meeting of the American Heart Association (AHA) to hear the latest and greatest in heart-related scientific research.
A major (unofficial) topic of this year’s meeting was the AHA-Pfizer flap. In late October, Pfizer released data from a clinical trial indicating that its experimental “good†cholesterol medication torcetrapib increases blood pressure. The news dealt a blow to Pfizer’s hopes that the medication will become the next Lipitor, as physicians may be hesitant to prescribe a heart medicine that raises blood pressure – unless the drug’s benefits outweigh the risks.
Pfizer’s decision to release the torcetrapib data infuriated the AHA. The medical society has a strict policy that prohibits those presenting data during its late breaking clinical trial sessions from releasing it prior to the meeting. On November 10, AHA announced that it was pulling Pfizer’s torcetrapib data because the company had violated its regulations. Pfizer later apologized to AHA for breaking its rules.
Medical Meeting Madness
AHA’s move is significant because over the years, medical meetings have become high profile forums for drug companies to tout their latest data. Being featured in a late-breaking clinical trial session is the holy grail for many companies because it is a sure-fire way to garner attention for a product. In addition, poster sessions are places where researchers present important pre-clinical and clinical data that is closely watched by analysts, drug firms and others.
In short, medical meetings are not only places where research is discussed, but vehicles for drug firms to market their products and differentiate them from competitors. For these reasons medical meeting madness is good for AHA and a host of other medical societies.
Why Pfizer Did It
Weeks before an annual meeting is scheduled to begin, the AHA posts preliminary information about research that will be presented during the event online. (Access is restricted to those who register on AHA’s Website.) This is why analysts, investors, journalists and others scour the AHA’s Website for clues on the latest company research.
In this case, Pfizer’s torcetrapib abstract was posted to the AHA’s Website on November 1. Pfizer, knew that as soon as the data appeared on people would be asking a lot of questions about the blood pressure results. The company had to find a way to manage the story to:
- Mitigate its impact on the company’s stock price
- (Attempt to) shape how the media reported the data.
I was not privy to the conversations Pfizer was having in the days before it decided to issue a press release about torcetrapib. However, I am quite company officials decided to go public with the results for some of the reasons listed above. Torcetrapib has the potential to be Pfizer’s flagship product. In this case, controlling the timing and interpretation of the data was more important to the company than hewing to AHA’s polices.
Another consideration had to be SEC regulations. Like other public companies, Pfizer is required to make material information publicly available. Given that the torcetrapib abstract appeared on November 1, the company could not afford to wait days before making an announcement.
Other Implications
The conflict between federal regulations and medical societies’ embargo policies is not a new subject. Investors and others have long complained that insiders with access to scientific abstracts and thought leaders can game the system. Some buy and trade stock in the days before medical meetings based on information that is public, but not widely distributed. In some respects, Pfizer was in the right. It made sure that everyone – not just those with access to AHA’s Website – could learn about information that could impact its stock price.
Clearly, Pfizer can afford to weather the AHA’s wrath. If its researchers have data on another major product, you can be sure that it will submit it to the AHA in the future. However, the company will think long and hard about whether it is worth it to violate the AHA’s embargo policy.
I think the AHA’s action may have a bigger impact on smaller companies that are much more reliant on the its medical meeting machine to raise awareness of their products. The AHA’s message to these firms is: Mess with us at your peril. Whether or not the data is material, these companies will be even less willing to break the AHA’s embargo policy.
The bigger issue is whether the AHA will take steps to ensure that material information is not revealed to any segment of the public before it is presented during a scientific meeting. Requiring a company to keep mum while analysts, savvy investors and competitors mine abstracts, contact key opinion leaders and conduct other forms of competitive intelligence may be asking for too much. Clearly, AHA and other medical societies will have to think about whether and how they will reconcile their embargo policies with the real world.
