A word about that FDA side effect database

For roughly 28 minutes yesterday, Vertex Pharmaceuticals had a problem. Shares were down about 4% as word spread on Wall Street that, according to a federal database, 30 people who took the company’s latest cystic fibrosis drug later died.

But Vertex’s stock price would soon recover and then some, likely because of the database in question. It’s called the FDA Adverse Event Reporting System, or FAERS, and it’s full of accounts describing drug side effects. The thing about FAERS is that anyone can submit reports to it, and the FDA does not adjudicate whether a given side effect is actually related to the drug in question. That’s why trading on FAERS news, as investors did for those 28 minutes yesterday, is often an overreaction.

And yet! Just hours after the Vertex situation came an official warning from the FDA that using certain hepatitis C treatments from Gilead Sciences, AbbVie, and Merck has, “in rare cases” resulted in liver failure. According to the agency, the warning came about because of 63 reported cases of liver damage in patients taking those drugs, and, if you scroll to the bottom, you’ll find the following: “The cases were reported to the FDA Adverse Event Reporting System (FAERS).”

All of which is to say a given FAERS report is hardly damning on its own, but that doesn’t mean you can ignore the whole database.