Bloomberg News

Glaxo Settles Almost 25,000 Avandia Cases Under Mediation

February 15, 2012

(Updates with company statement in eighth paragraph.)

Feb. 14 (Bloomberg) -- GlaxoSmithKline Plc settled almost 25,000 cases over its Avandia diabetes drug in mediation as multidistrict litigation begins to wind down, lawyers told a federal judge in Philadelphia.

In November, U.S. District Judge Cynthia Rufe appointed a mediator to preside over settlement negotiations. She also set a 75-day deadline to resolve 85 percent of the remaining cases. While it was unclear in a court hearing today whether lawyers met the threshold, Rufe called the effort “a major success.”

“Mediation will no longer be the focus of this court’s effort,” Rufe said. “We will resolve the remaining cases through litigation.”

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

More than 2,500 Avandia cases are consolidated before Rufe in Philadelphia. Other cases are pending in state courts around the U.S. So far, as many as 50,000 cases have been resolved, including claims filed in both state and federal court, Diane Nast, a plaintiffs’ attorney who serves on a group helping to oversee cases, told Rufe today.

‘Not All’

“From what I’m hearing today, there aren’t a lot of cases left to be tried, and not all those cases will make it to trial,” Rufe said.

Glaxo said in 2010 that it would stop promoting Avandia worldwide after studies linked the drug to increased risks of heart attacks. The company already agreed to pay at least $700 million to settle more than 15,000 patients’ claims that the drug caused heart attacks and strokes, people familiar with the accords said last year.

“The majority of the cases in total have been settled,” Bernadette King, a U.S.-based Glaxo spokeswoman, said today in a phone interview. “The cases have to be reviewed and the precise numbers determined at some point to see which cases qualify under the settlements.”

The most recent settlements are covered by existing provisions and will be funded through existing cash resources, King 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).

--With assistance from Jef Feeley in Wilmington, Delaware. Editors: Peter Blumberg, Andrew Dunn

To contact the reporter on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net

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


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