Settlement of Avandia Diabetes Drug Case Averts First Trial

GlaxoSmithKline has settled a widely followed lawsuit over its Avandia diabetes drug, averting the first trial out of thousands of cases that allege the company failed to warn consumers about the heart attack risks of the medication.

The settlement resolves what the presiding judge chose as a case to serve as a “bellwether” of how juries would decide subsequent trials. It involved James Burford, an Avandia user from North Carolina who died of a heart attack in 2006 at the age of 49. But on the eve of the Burford trial, Glaxo said it had settled the case — and also resolved the other roughly 200 Avandia cases brought in Philadelphia by plaintiff attorneys Joseph Zonies and Thomas Cartmell.

The amount of the settlement was not disclosed. More than 1,600 Avandia cases have been consolidated in Philadelphia, including those filed by Zonies and Cartmell, and another 400 are pending elsewhere around the U.S.

Glaxo two weeks ago announced it was taking a $3.5 billion charge due to investigations and lawsuits associated with the drug, raising to $6.4 billion the amount it has reserved to cover Avandia-related legal costs.

According to Reuters, Avandia was once Glaxo’s second-biggest drug, with sales of $3 billion a year. But in 2007, it was linked to heart attack risks in an influential study and sales plummeted. Glaxo announced in September it would stop promoting Avandia worldwide after European regulators withdrew the drug, and U.S. regulators imposed tight restrictions on the sale of the medicine.

A drug industry analyst told Bloomberg that the settlement of the Burford case eliminates the risk Glaxo would face a large jury award. Investors worried it “could lead to substantial punitive damage,” Navid Malik said. The company, he said, “needs to successfully settle as many of these cases as possible.”

The company agreed last year to pay about $460 million to resolve about 10,000 earlier Avandia suits. Those settlements generated another wave of suits.

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