There was a time when Merck was synonymous with innovative medicine. Now, though, the drug maker gets high marks for innovative marketing, but not much more. Consider the recent FDA approval of a new combination cholesterol pill that, instead of offering a benefit to patients who may be at risk of cardiovascular disease, instead raises questions about regulatory judgment and corporate motives.

The drug in question is called Liptruzet, which combines Zetia and atorvastation, the active ingredient in Lipitor, the Pfizer drug that is now widely available as a generic. However, Merck already sells Vytorin, which combines Zetia with Zocor, its own developed statin also known as simvastatin. And Vytorin has a troubled history, to say the least. For those who do not recall, here is a summary of the sordid past.

In 2008, a controversial study called Enhance found the drug could lower LDL cholesterol, but failed to show a benefit over Zocor alone in the key endpoint — reducing plaque in the carotid artery. Instead, there was a statistically insignificant buildup of plaque. This was hardly the sort of outcome that would ‘enhance’ Vytorin in a crowded marketplace for cholesterol-lowering therapies.

But there were other reasons the Enhance results badly tarnished Merck. Along with co-development partner (and subsequent M&A victim) Schering-Plough, Merck changed the primary endpoints, failed to include the lead investigator in this decision and stalled at naming members of a purportedly independent panel for reviewing data.

Moreover, there were ongoing delays in releasing the results, leading to a congressional probe and shareholder lawsuits, all of which raised uncomfortable questions about whether Vytorin patients were receiving sufficient benefit for a heavily promoted pill. The investigation and litigation also focused on concerns that Schering-Plough executives may have profited from advance knowledge of the findings.

Since then, Merck has attempted to compensate by launching an 18,000-patient trial called Improve-It to dispel concerns that Vytorin is ineffective or worse. However, results have been delayed more than once and now are not due until September 2014. And the timing helps explain why the Liptruzet approval is generating cynicism toward Merck management.

For instance, what happens if the results are unfavorable? In this event, Merck is left with a pair of cholesterol pills generating declining revenue. Last year, the Vytorin and Zetia pills generated $4.31 billion, the same amount they generated the year before and the year before that. The key reason is that Vytorin sales have been steadily eroding — from $2 billion in 2010 to $1.7 billion in 2012.

Now, what happens if the results are favorable? Well, Merck still has a dilemma, because Vytorin’s patent expires in 2017. That’s roughly three years after the Improve-It trial results will become known and not a whole lot of time to turn around Vytorin sales. But by winning approval for Liptruzet, Merck has found a way to bolster its flagging cardiovascular franchise.

There is a catch, however, and this is where Merck gets some deserved criticism. The drug maker acknowledged that Lipruzet does not offer any “incremental benefit on cardiovascular morbidity and mortality over and above” what atorvastatin delivers. Yes, you read that correctly. This hardly amounts to an overwhelming incentive for physicians to prescribe or for payers to provide much, if any coverage.

In other words, patients should not expect the new combination pill to offer any advantage in reducing the chance of developing heart disease. The only true innovation here is in the marketing. Of course, this is a big win for Merck, even if the maneuvering is a disappointing reminder that, sometimes, drugmakers devote more resources to end games emphasizing profits rather than truly benefiting patients.

Of course, these companies are beholden to their shareholders and some on Wall Street were quick to declare that investors should be pleased. One analyst opined that the FDA would not have approved Liptruzet if there were indications of worrisome signs with the Improve-It trial. If this scenario is correct, then Merck has, indeed, scored a much-needed win for its product portfolio — and investors.

“FDA is likely privy to the general findings from Improve-It’s various interim looks that have occurred, and being a risk-averse agency, if there hints of harm it would likely steer clear of approving any new Zetia formulations until full Improve-It results are in,” wrote Sanford Bernstein analyst Tim Anderson. “If this logic is right, then the Merck story has just been partially de-risked (at least on this one event).”

But as one managed care executive noted, such approvals serve as a good reason for health plans to maintain closed formularies. And given that Merck needs to boost revenue, it is unlikely Liptruzet will offer a cost advantage, which means the pill will really offer no advantage at all. In other words, Merck may still have a tough sell, especially if the Improve-It results are unfavorable. 

There is another angle to this story, though, and that is the role of the FDA. Unlike so many other instances when a drug is approved, the agency this time did not release a statement explaining its rationale for endorsing Liptruzet. This was a classic instance in which the lack of explanation allowed criticism to fill the void — and the criticism was stinging.

“I find it astonishing that, after all the controversy about (Vytorin), the FDA would approve another combination product with a drug that has been on the market for a decade and has not been shown to improve cardiovascular outcomes,” Steve Nissen, who heads the cardiology department at the Cleveland Clinic Fondation, told Forbes. “It seems like the agency is just tone deaf to the concerns raised by many members of the (medical) community about approving drugs with surrogate endpoints, like cholesterol, without evidence of a benefit for the disease we are truly trying to treat — cardiovascular disease.”

There is some irony here, by the way, because the FDA recently boasted that more new drugs were approved last year than in previous years — 39, to be specific — and amounted to the largest such tally since 1996. And in boasting about this accomplishment, FDA commissioner Margaret Hamburg noted these included many new types of drugs, as well as an emphasis on personalized medicine.

Instead, the Liptruzet approval has now prompted speculation that the agency has become too concerned with a “numbers game,” reflecting increased pressure from the pharma industry and its allies in Congress, who expect to see tangible results for the increased user fees that drug makers pay each year for the drug review process.

So to be fair, the FDA is caught in something of a dilemma, even if the criticism has a reasonable ring to it all. The agency had a regulatory obligation to review Liptruzet and the pill, presumably, passed the necessary hurdles. The FDA is not expected to reject a drug because its benefit closely resembles one or medicines already available.

If nothing else, the FDA is complicit in allowing the skepticism toward this episode to fester, simply because the agency has remained silent on its reasoning behind this controversial approval. Merck may have pulled a fast one on its way to pleasing shareholders, but the FDA inadvertently undermined its own credibility in the process.

Keep in mind, this is an agency that, for the past several years, has insisted that patient safety is paramount, especially in the wake of such safety scandals as the withdrawal of the Vioxx painkiller over links to heart attacks and strokes. (Yes, that was another Merck drug.) Since then, the FDA has worked hard to restore its image as a worthy watchdog, but the Liptruzet approval may erode any perceived gains.

Some may not find the Merck maneuvering terribly surprising. A recent survey of 600 patient advocacy groups in the U.S. and Europe found that, in general, only 34% believe the pharma industry has an excellent or very good reputation. And Merck ranked just 18th out of 29 drugmakers listed when it comes to having a patient-centered strategy.  

The FDA, of course, occupies a different role in society. But fulfilling regulatory obligations is only part of its job. The agency would have better served its constituents — the public at large — by explaining why Liptruzet was approved and, in particular, how patients can be expected to benefit. Right now, this remains unclear. As a result, the score looks like this: Merck and shareholders – 1, patients – 0.