Wyeth's Troubles: Ghostwriting to Be Revealed; Centrum Sales Weak

Last Updated Jul 26, 2009 7:51 PM EDT

Wall Street applauded Wyeth's Q2 2009 earnings report but with the dust settled it turns out there are a couple of cracks in the Wyeth business as is prepares to merge with Pfizer.

The First one is its Centrum vitamin unit, which was down 7 percent to $171 million.

The second was a ruling by a federal judge that Wyeth must reveal its ghostwriting practices in 8,000 Prempro and Premarin cases. Plaintiffs allege that those menopause symptom pills may cause breast cancer.

The ghostwriting allegations have the potential to be a PR nightmare for Wyeth: One intervenor seeking the documents is the New York Times; separately, Sen. Charles Grassley, R-Iowa, sought them last year in a congressional investigation of drug-industry influence on doctors.

On the Centrum issue, Wyeth is apparently not expecting those sales to go up again in the near term. It laid off 15 workers recently at its Centrum factory recently, in addition 13 who were let go in March. Here's BurbsBiz's explanation:

Sales of Centrum have slowed in recent months as consumers, facing tighter budgets in a weakening eocnomy, shifted purchases to cheaper private-label vitamins.
It's not just private-label price competition, however. The newly aggressive FDA's exposure of the diet supplement business's fraudulent practices is making some consumers think again. The feds recently busted Zicam, Hydroxycut and Stamina-Rx for being potentially lethal or debilitating. And the FTC is currently considering a petition asking it to investigate alleged false marketing by Bayer of its One A Day brand. So the entire industry is under a cloud right now.

There's plenty to look at in Wyeth's marketing of Centrum. Take this press release, for instance. Its says:

Many Americans still find it difficult to get the recommended amounts of vitamins and minerals they need from food alone despite the wide variety of nutritional choices available.
The phrase "food alone" is a clever one. It suggests that mere "food" is not enough to sustain a human. In fact, very few Americans go malnourished for the periods of time required to develop a vitamin deficiency. This U.S.D.A. report in food insecurity says that:
3.5 percent of U.S. households were food insecure to the extent that one or more household members was hungry, at least some time during the year, because the household could not afford enough food.
So maybe, just maybe, 3.5 percent of Americans might benefit from vitamins. Whether the government's actions will lead consumers to become a bit more science-based in their choice of pills has yet to pan out. But here's something that will eventually pan out: This Congressional investigation, started in 2008, of whether Wyeth touted Centrum as a cholesterol drug.