An FDA advisory panel is recommending that GlaxoSmithKline's controversial diabetes drug remain on the U.S. market. Can it recover its lost share?
British drugmaker GlaxoSmithKline (GSK) is breathing a sigh of relief after a Food & Drug Administration advisory panel voted overwhelmingly in favor of keeping the company's controversial diabetes treatment, Avandia, on the U.S. market despite data that suggests it may raise the risk of heart attack. The panel claimed there wasn't sufficient evidence to merit pulling the drug from the market but instead recommended that the FDA require Glaxo to include strong new warnings on Avandia's label. Although the FDA is not required to follow the panel's recommendations, it usually does. "We welcome this decision as positive for patients," GSK's Chief Medical Officer Dr. Ronald Krall said in a statement following the vote. "Diabetes is a progressive disease that exacts a terrible toll on its victims, and it is important that Avandia remain a treatment option for patients."
But the question remains whether or not doctors will continue to prescribe the drug and whether patients will still want to take it. The concerns over increased risk of heart attack are in addition to a well-established problem with swelling that can occur in patients taking both Avandia and Actos, a similar drug from Japan's Takeda Pharmaceutical. Both drugs for years have had warnings about how they can trigger or exacerbate heart failure. But the latest fears over an increased risk of heart attack have been focused on Avandia. And considering heart disease is a common complication of type 2 diabetes, which affects an estimated 20 million Americans, any drug that is perceived to increase the existing risk is likely to be given short shrift by patients.
The controversy surrounding Avandia, the world's best-selling oral medicine for the treatment of type 2 diabetes with 2006 sales of $3.4 billion, began in May when an article in The New England Journal of Medicine linked Avandia to a 43% increased risk of heart attack. The article, which pooled data from dozens of previous studies, in a controversial approach called a meta-analysis, triggered an industry-wide debate over the value of meta-analysis and a congressional hearing (see BusinessWeek.com, 8/6/07, "When Medical Studies Collide").
A number of experts have found fault with the NEJM study and called on the FDA to keep the drug on the market. Dr. Zachary Bloomgarden, an endocrinologist and clinical professor at Mount Sinai School of Medicine in New York, submitted evidence to the FDA in advance of the meeting challenging the statistical accuracy of the analysis in the NEJM report. "A lot of spin has been given to an analysis using questionable methodology," he says. "But this drug is very effective treatment for many diabetic patients."
While that may be true, many analysts believe the damage to Avandia's reputation has already been done. Since May, sales of the drug—and GSK's share price—have plummeted by 22% and 12%, respectively, as doctors turned to a similar drug, Takeda's Actos, and other oral antidiabetic drugs from Merck (MRK) and Eli Lilly (LLY). Within the oral antidiabetic market, Avandia's share of prescriptions written for new patients by primary care doctors fell from 15% in early May to less than 5% as of July 27, according to ImpactRx, a pharmaceutical market research firm in Mt. Laurel, N.J.
Moreover, GSK is now facing the threat of litigation. In June, U.S. law firm Kaplan Fox & Kilsheimer filed the first class action against GSK in New York, alleging that the company misled investors over the safety of the diabetes drug. According to the company, several additional lawsuits have been filed since. In addition to the class action, a wrongful death suit, a shareholder suit, and a personal injury suit have been filed in other U.S. courts. Although it is still too early to assess the lawsuits' chances of success, the fact that the FDA panel has recommended keeping the drug on the market could help bolster the company's defense.
Analysts say the panel's decision is good news for GSK's share price, which rose 4% on July 31. But winning back the confidence of doctors and patients won't be as easy. Avandia's "competitive position has been weakened," says Béatrice Muzard, a pharmaceuticals analyst at Natexis Securities in Paris. And GSK is going to have to invest heavily "if the product is to recapture the lost market share," she adds.
Chances for a Relaunch
At the company's second-quarter results meeting, GSK Chief Executive Jean-Pierre Garnier spoke about the possibility of "relaunching" Avandia once the FDA advisory panel made its recommendation. Although the company says it is too early to discuss specific strategy, the expectation is that if GSK is to claw back the market share it has lost, it will have to embark on an aggressive marketing campaign in the U.S. This is likely to involve an educational campaign for both patients and doctors via advertising and other patient awareness programs.
But the company's strategy will depend on whether both Avandia and its rival Actos are required to change their labeling to include the risks or whether the decision applies only to Avandia. If only Avandia is required to carry the label, a costly relaunch no longer makes economic sense.