Glaxo May Settle 1,000 More Lawsuits Over Avandia, Patients’ Lawyer Says

GlaxoSmithKline Plc (GSK), after setting aside more than $6 billion to help settle lawsuits over medicines including its Avandia diabetes drug, is poised to resolve 1,000 more cases, a lawyer for patients said.

Glaxo, the U.K.’s biggest drugmaker, is in settlement talks with lawyers for an estimated 1,000 former Avandia users who sued the company in state courts in Pennsylvania, California and Illinois, Dianne Nast, a plaintiffs’ attorney who serves on a group helping to oversee cases consolidated in federal court in Philadelphia, said in an interview yesterday.

“There are a total of about 5,300 state-court cases pending” around the country, Nast told U.S. District Judge Cynthia Rufe at a hearing in Philadelphia. “I expect a multiple number of them probably will be resolved.” After the hearing, Nast declined to comment on the amount of any settlements.

The company said in September it would stop promoting Avandia worldwide after regulators said the treatment would be withdrawn from the market in Europe and sales would be limited in the U.S. because of studies linking the drug to increased risks of heart attacks.

Sales of Avandia fell 43 percent in the wake of the restrictions, the company said. Avandia was once the world’s best-selling diabetes pill, generating $3 billion in annual sales.

$3.5 Billion Charge

Glaxo officials have agreed to pay at least $700 million over the last eight months to resolve about 12,000 suits alleging the drugmaker failed to warn consumers that Avandia could cause heart attacks and strokes, people familiar with the accords told Bloomberg News earlier.

Bernadette King, a U.S.-based Glaxo spokeswoman, declined comment on the Avandia settlement talks. Glaxo shares rose 3.5 pence to 1,310 pence at the close of London trading.

Glaxo said in January it was taking a $3.5 billion charge to cover expenses linked to investigations and suits over Avandia and sales practices on other drugs. The reserve brings to more than $6 billion the amount the drugmaker has set aside for legal costs tied to Avandia and other drugs, such as its antidepressant Paxil.

Glaxo officials also updated Avandia’s warning label in February to include safety restrictions ordered by federal regulators, who cited studies showing the drug poses an increased risk of heart attack and stroke for some users.

Along with the state court cases, Glaxo faces about 1,600 suits consolidated before Rufe in Philadelphia for pre-trial proceedings, Nast said. Those are the cases that remain after the settlements, she added in an interview outside court.

2,400 Claims Settled

Settlement talks in state court in Los Angeles already have resulted in 2,400 former Avandia users settling their claims, Nast told the judge. The lawyer said she expected the talks to generate about another 200 settlements in state court in Philadelphia and an undetermined number in Illinois.

Two Avandia cases have been set for trial in November in New Mexico and California, Nast said. Another New Mexico trial has been set for March 2012, she added.

Setting firm dates for jury trials helps push Glaxo and consumers to resolve the cases, Samuel Lanham Jr., a Bangor- Maine-based lawyer for former Avandia users told the judge.

“The sooner we get something teed up, the better,” he said.

The consolidated case is In re Avandia Marketing, Sales Practices and Products Liability Litigation, 07-01871, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).

To contact the reporter on this story: Jef Feeley in Wilmington, Delaware, at jfeeley@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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