Bloomberg News

Glaxo Settles 20,000 Lawsuits Over Avandia, Lawyer Says

February 14, 2012

(Updates with details on $3 billion settlement starting in 15th paragraph.)

Feb. 1 (Bloomberg) -- GlaxoSmithKline Plc, which is paying $3 billion to resolve government claims that it illegally marketed drugs such as the Avandia diabetes medication, agreed to settle more lawsuits over the pills, a lawyer said.

Glaxo, the U.K.’s biggest drugmaker, agreed last month to resolve more than 20,000 cases alleging Avandia causes heart attacks, said Paul Kiesel, a lawyer for former users. The accord, reached in court-ordered mediation, included a case that was set for trial in state court in Los Angeles, he said.

“We are pleased the mediation has successfully resulted in the settlement of a significant number of the remaining cases,” Kiesel, one of the lead lawyers for plaintiffs in the Avandia litigation, said yesterday in a telephone interview.

The settlements are part of London-based Glaxo’s efforts to resolve legal issues stretching back more than a decade. Executives announced in November that the drugmaker will pay $3 billion to settle U.S. criminal and civil probes into whether Glaxo illegally marketed Avandia and other medications.

The company already has agreed to pay at least $700 million to settle more than 15,000 patients’ claims that Avandia caused heart attacks and strokes, people familiar with the accords said last year.

‘Cash Resources’

The most-recent settlements of Avandia patients’ suits “are covered by existing provisions and those payments will be funded through existing cash resources,” Bernadette King, a U.S.-based Glaxo spokeswoman, said in an e-mailed statement yesterday.

More than 2,500 Avandia cases are consolidated before U.S. District Judge Cynthia Rufe in Philadelphia, who appointed a mediator in a bid to resolve the remaining claims over the drug. Other cases are pending in state courts around the U.S.

Patrick A. Juneau, a Lafayette, Louisiana-based lawyer named as the Avandia mediator, helped the company and plaintiffs’ lawyers reach agreement on the accords for the more than 20,000 cases, Kiesel said.

Bill Robbins, a New Mexico-based plaintiffs’ lawyer who represented many of the former Avandia users who settled their cases last month, didn’t return calls for comment on the accords. They included claims that were filed in both state and federal courts, Kiesel said.

Remaining Cases

Rufe had set a 75-day deadline to resolve 85 percent of the remaining cases through the mediation program, according to court filings. Kiesel said it’s unclear whether enough cases have been settled to meet the deadline.

If there aren’t enough settlements to meet the judge’s requirements, Rufe has said she will begin scheduling cases for trial. So far, no Avandia cases have been considered by a jury, Kiesel said.

Janet Johnson, a former Avandia user, was scheduled to bring her case to trial in state court in Los Angeles Jan. 17. Her claims were resolved as part of the latest round of settlements, Glaxo’s King said in an e-mail.

The company said in 2010 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.

Falling Sales

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 $3 billion settlement is designed to resolve a federal- government probe of Glaxo’s marketing of drugs such as Avandia and its Advair lung treatment.

Federal prosecutors began an investigation in Colorado in 2004, later taken over by the U.S. attorney in Massachusetts, into whether Glaxo promoted drugs for unapproved uses and attempted to silence critics of the drug. The probe focused on nine of the company’s best-selling products from 1997 to 2004.

A University of North Carolina professor told lawmakers in 2007 that Glaxo officials pressured him to stop raising questions about the safety of Avandia when it came on the market in 1999.

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).

--Editors: Stephen Farr, Fred Strasser

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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