Avandia Lawsuits Could Cost Glaxo as Much as $6 Billion

Liability for <"http://www.yourlawyer.com/topics/overview/avandia">Avandia lawsuits could total as much as $6 billion, according to a UBS analyst. GlaxoSmithKline, the maker of Avandia, faces more than 13,000 U.S. lawsuits over the controversial diabetes drug.

Avandia has been the subject of safety concerns for several years. In November 2007, a black box warning – the Food & Drug Administration (FDA’s) strongest safety warning – detailing Avandia’s association with myocardial ischemia was added to the drug’s labeling. The black box was added after the Cleveland Clinic published a meta- analysis of 42 clinical trails that showed patients taking Avandia had a 43-percent higher risk of having a heart attack.

Last month, the Senate Finance Committee released a report detailing its 2-year Avandia investigation. According to the report, in July 2007 the FDA’s own scientists estimated that Avandia was responsible for more than 80,000 heart attacks. Two of the FDA’s own doctors wrote in an October 2008 memo that Avandia should be removed from the market because it poses serious heart-related dangers to patients, the report said. The Senate report also claimed that Glaxo tried to undermine criticism of the drug. The report drew on 250,000 pages of documents, including emails from GlaxoSmithKline officials, as well as interviews with Glaxo and FDA officials and anonymous whistleblowers.

Since the release of the Senate report, calls have increased for the FDA to pull Avandia off the market. The FDA is conducting another safety review of Avandia, the results of which will be discussed at a public meeting in July.

In a UBS note made public last Friday, the brokerage said Glaxo’s Avandia lawsuit liability was in the range of $1 billion to $6 billion. “We expect liability below the midpoint of this range and note GlaxoSmithKline has underperformed by around $2.5bn already,” the note said.

Avandia lawsuits allege that GlaxoSmithKline failed to adequately warn users about the increased risk of serious and potentially life-threatening injuries, such as heart attack, stroke, congestive heart failure, liver failure, bone fractures, macular edema (vision loss) and death. Federal Avandia lawsuits have been consolidated for pretrial proceedings in an MDL, or multidistrict litigation, in the U.S. District Court for the Eastern District of Pennsylvania. The first bellwether, or test trials, in that litigation are expected to begin in June.

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