Watch CBS News

Why Merck's Hair Loss Drug Could Make Its Income Statement Go, Um, Limp

Merck (MRK) is experiencing some rough PR issues on its hair-loss drug Propecia following a study that suggests up to 15 percent of men taking the drug might experience some form of sexual dysfunction. For years, the warning label on Propecia has said that only 2 percent of men might experience erectile dysfunction while using the drug, and if users stop taking the pills everything returns to normal:

A small number of men had sexual side effects, with each occurring in less than 2% of men. These include less desire for sex, difficulty in achieving an erection, and a decrease in the amount of semen. These side effects went away in men who stopped taking PROPECIA because of them. In addition, these side effects decreased to 0.3% of men or less by the fifth year of treatment.
But the new study, in the Journal of Sexual Medicine, suggests the rate of dysfunction is a lot higher and that in some cases men are permanently hobbled by erectile dysfunction or loss of libido even after stopping the drug. The study dovetails with a recent BBC report on one 26-year-old man who claims the drug ruined his life.

He's not the only one. A quick search of hair-loss comment boards shows that plenty of men have had the same experience: They grew hair but lost their sex lives:

i am now 32, and i have all my hair!! yet, all this time, i had thought...i'm just getting older, things are not working quite as well. in fact, thinking back, i had lost my morning erections a long time ago and had pretty lousy quality erections otherwise. i recently had experiences with a new sexual partner that made me question whether this medicine was harmless or not, and then reviewed some of the medical literature. i then went to speak to my own doctor and he was certain it was the propecia.

... the more i read, the more i realize that although i am thankful for the past 12 years of hair, i basically emasculated myself for the past 12 years too, and thats frightening.

None of this is proof-positive, of course. But it does focus attention on the fact that in Sweden, health authorities require Propecia to carry a warning that sexual side effects of the drug may be irreversible. That's a much more serious warning than the one the drug carries in the U.S.:

And in Brazil some researchers recommend using the drug to treat dangerous priapism in sufferers of sickle-cell anemia.

These issues, while titillating, are not trivial. Merck earns about $400 million a year in revenue from Propecia. The company is increasingly dependent on that cash stream as Propecia's patent exclusivity lasts through 2013. The company just halted development of vorapaxar, a blood-thinner, after tests showed it was too dangerous. That drug was estimated to potentially earn more than $1 billion in revenues by 2015, according to analyst Tim Anderson at Bernstein Research. Merck could lose another massive product, the rheumatoid arthritis drug Remicade, which sells $1.3 billion a year, if an arbitration ruling expected in the next few weeks goes the wrong way. That ruling could potentially say that Merck's merger with Schering-Plough triggered a contract agreement with Johnson & Johnson (JNJ) that allows J&J to take full possession of Remicade in the event of a change of control at Schering.

If U.S. authorities were to follow the Swedish, and if Merck lost Remicade to J&J, then its income statement would start to look rather limp, rather quickly.


Image by Flickr user joelk75, CC.
View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.