Avandia: GlaxoSmithKline face £1.5bn legal bill

Avandia

The pharma giant is reportedly set to face a legal charge of £1.57 billion for the second quarter over its diabetes pill Avandia and antidepressant Paxil. The massive total includes settlements, agreements in principle to settle, and other provisioning for long-standing legal cases against the firm's products.

It comes after an investigation by the US Government into the company's former manufacturing site at Cidra, Puerto Rico; product liability and anti-trust litigation relating to Paxil (paroxetine), and product liability cases regarding Avandia (rosiglitazone) and other products.

However despite the massive legal bill, the UK's largest drugmaker will still be allowed to sell its diabetes pill Avandia in the US, but with more warnings about the potential for heart risks.

The diabetes treatment has been a massive money-spinner for Glaxo, generating $1.1 billion in sales last year alone. However, this was only one-third the revenue it had earned before data emerged two years ago linking the medicine to a 43 percent increased risk in heart attacks.

Since then, there have been dozens of trials and studies in order to prompt the US FDA to ‘re-examine' its 2007 decision of an Avandia recall.

"Avandia is not fully out of the woods yet"

Speaking to the Washington Post, Timothy Anderson, an analyst at Sanford Bernstein & Co. in New York was quoted as saying, "While the product seems destined to remain on the market as an option for prescribers and their patients, Avandia is not fully out of the woods yet."

"It is possible that Avandia could still face withdrawal in certain ex-US markets, but the odds seem better now with the US recommendation to stay on the market in hand."

In the time that Avandia has been under scrutiny, it has lost market share to new diabetes drugs such as Merck and Co's Janvuia, Amylin Pharmaceuticals Inc. and Eli Lilly & Co.'s Byetta, and Novo Nordisk A/S's Victoza.

An estimated 23.6 million Americans have diabetes, mostly the Type 2 variety linked to being overweight and sedentary, according to the National Institutes of Health. The disease is caused by an inability to use insulin to break down blood sugar into energy and can increase the risk of heart disease, stroke and kidney damage.

Relevant articles:

Sanofi-Aventis to acquire US firms? | Being short increases risk of heart disease | Roche's diabetes drug faces long delay

Like this article? Get the RSS feed: