Glaxo Facing Mediation Push to Resolve Remaining Lawsuits Over Avandia

GlaxoSmithKline Plc (GSK), which has agreed to pay $3 billion to resolve claims it illegally marketed its Avandia diabetes drug, is facing a judge’s push to resolve most of the remaining patient lawsuits over the medication.

U.S. District Judge Cynthia Rufe said yesterday she appointed a mediator to “preside over settlement negotiations” for an unspecified number of Avandia cases consolidated before her in Philadelphia. Rufe set a 75-day deadline to resolve 85 percent of the remaining cases, according to court filings.

“If we don’t make it within the time period, the judge will start fast-tracking cases for trial,” said Paul Kiesel, a lawyer representing California residents suing over the drug.

Glaxo, the U.K.’s biggest drugmaker, is trying to resolve legal issues stretching back more than a decade. Executives said Nov. 3 the London-based company will pay $3 billion to settle U.S. criminal and civil probes into whether Glaxo illegally marketed Avandia and other medications.

“GSK welcomes the court’s mediation order and looks forward to constructive discussions with the special master,” Bernadette King, a U.S.-based Glaxo spokeswoman, said in an e-mailed statement today.

Glaxo already has agreed to pay more than $700 million to settle patient claims that Avandia caused heart attacks and strokes, people familiar with the accords said earlier this year. The settlements resolved more than 10,000 cases, the people said.

20,000 Cases

Kiesel estimated that Glaxo still faces about 20,000 Avandia claims, comprising cases consolidated before Rufe, those filed in state courts and suits that have been stayed subject to agreements between the drugmaker and plaintiffs’ lawyers.

“Its unclear at this point how many cases” will be subject to mediation, Kiesel said.

Rufe named Patrick A. Juneau, a Lafayette, Louisiana-based lawyer, to mediate in the Avandia cases. Juneau has served as a mediator in more than 2,000 cases, including those brought by breast-implant patients and plaintiffs suing Guidant Corp. over faulty heart defibrillators, according to his law firm’s website.

If Juneau is unable to resolve 85 percent of the cases within the 75-day period, Rufe said she will put 100 of the oldest suits into a trial pool and push to have them ready to be presented to jurors within 60 days, according to court filings.

Trials Pushed Back

Glaxo originally was slated to face the first trials of Avandia users’ claims this month, Kiesel said. Judges in California and New Mexico have pushed trials back until next year, he said.

The company said last year 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, Glaxo said. Avandia was once the world’s best- selling diabetes pill, generating $3 billion in annual sales.

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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