Shares of large drug makers fell on Thursday after a top U.S. cardiologist questioned the safety of new arthritis drugs and the performance of U.S. regulators in monitoring drug safety.

Merck and Co. (MRK), which recalled its popular arthritis pill Vioxx (search) last week on safety concerns, and the Food and Drug Administration (search) came under attack from an editorial in the New England Journal of Medicine (search) and a subsequent editorial in the British medical journal the Lancet (search).

"The New England Journal article makes people worry that there will be increased scrutiny on pharmaceutical companies," said Weidong Huang, vice president of TimesSquare Capital Management.

Health stocks in Europe fell as investors took a gloomier view of the industry's prospects following a downbeat presentation from AstraZeneca (AZN) on Wednesday. Analysts said the meeting highlighted problems facing drug makers due to a lack of new products, pressure on prices, rising costs and growing competition from generics.

In an editorial in the New England Journal of Medicine published late on Wednesday, Dr. Eric Topol of the Cleveland Clinic accused Merck of irresponsibly promoting Vioxx after clinical trials in 2000 first pointed to its risk of causing heart attacks. He also said U.S. regulators had failed to protect the public.

"His editorial underscores that the drug industry is a risky business and investors don't know what to expect next," said Deutsche Bank analyst Barbara Ryan. "People are just worried."

Topol, in his editorial and in subsequent media interviews, pointed to the 2000 study, in which Vioxx was shown to quadruple the risk of heart attack in a Merck trial of 8,000 arthritis patients. Data from that trial were unveiled only months after Vioxx was launched in 1999.

Merck last week recalled Vioxx, which had sales of $2.5 billion a year, after another large trial showed that twice as many people taking it to prevent colon polyps had heart attacks as those taking dummy pills.

Topol also questioned the safety of similar new arthritis drugs, including Pfizer Inc.'s (PFE) popular Celebrex (search) and Bextra (search), which are members of the same class of treatments as Vioxx.

He said the U.S. Food and Drug Administration had failed to protect the American public by not requiring Merck to conduct new long-term trials of Vioxx to determine conclusively whether the pill raises the risk of heart attacks and strokes.

The Lancet made some of the same criticisms in its editorial on Thursday. "The Vioxx story is one of blindly aggressive marketing by Merck mixed with repeated episodes of complacency by drug regulators," the British journal said.

Merck denied it acted irresponsibly in the marketing of Vioxx and said it decided to voluntarily withdraw Vioxx from the market worldwide after the latest negative trial findings.

FDA officials were not immediately available for comment. They have previously said the agency acted appropriately by requiring Merck in 2002 to note the heart attack risks of Vioxx in the drug's package insert label and by working with Merck to incorporate safety monitoring in drug trials.

Other companies that do not sell the newer arthritis drugs also lost ground in the stock market on Thursday amid general uncertainty about the drug industry after Topol's attack on the FDA, according to Deutsche Bank's Ryan.

The American Stock Exchange Pharmaceutical Index (search) fell nearly 3 percent, dragged down by the nearly 4 percent tumble in Pfizer shares and a 2 percent decline in Merck.

Like Pfizer and Merck, shares of Eli Lilly and Co. (LLY) fell to a 52-week low. Lilly shed 3 percent to close at $59.56 on the New York Stock Exchange.

Merck closed down 69 cents at $30.98, while Pfizer dropped $1.19 to $29.99 after sinking as low as $28.75 earlier in the day. Pfizer was also hurt as investors expected a ruling this week by a federal court that could allow a generic form of its blockbuster epilepsy drug Neurontin to be launched in the United States.

Schering-Plough Corp. (SGP) fell 3 percent to $17.98, while Wyeth (WYE) lost nearly 2 percent to close at $37.64.

London-based AstraZeneca lost 2.5 percent, also hit by specific concerns about its new drug pipeline following last month's decision by a U.S. panel of experts to recommend rejection of its anti-clotting drug, Exanta (search).