GlaxoSmithKline has agreed to pay more than $250 million to resolve about 5,500 claims related to its Avandia diabetes drug and avoid the first trial over claims it can kill users, two people familiar with the accords said.
Glaxo, Britain's biggest drugmaker, agreed to settle the lawsuits claiming the drug causes heart attacks and strokes for an average of at least $46,000 each, said the people, who declined to be identified because they weren't authorized to speak publicly.
The accords included a previously reported settlement of an undisclosed amount for the family of James Burford, an Avandia user from North Carolina who died at 49 in 2006. The Burford family's case, filed in federal court in Philadelphia, was set for trial last week.
"An average of $46,000 per case is a modest price to pay, in the grand scheme of things," Gbola Amusa, an analyst at UBS in London, said in a telephone interview. "If Avandia definitively had caused heart attacks, Glaxo would have been forced to pay" as much as $1 million a case, he said.
The cases settled were filed by plaintiffs' lawyers Joseph Zonies and Thomas Cartmell. Glaxo was facing about 2,000 suits alleging the drugmaker hid Avandia's heart-attack and stroke risks prior to the settlements, lawyers for former users and the company said in court hearings. The company already agreed to pay about $460 million to resolve allegations it didn't properly warn doctors and consumers about the medicine's risks.
Mary Anne Rhyne, a U.S.-based spokeswoman for Glaxo, declined to comment on the settlements. Zonies, of Denver, and Cartmell, of Kansas City, Mo., didn't immediately return calls seeking comment.
Avandia sales fell 43 percent to $710 million last year in the wake of the sales restrictions, the company said. Avandia was once the world's best-selling diabetes pill, generating $3 billion in annual sales.
Glaxo said Jan. 17 it's taking a $3.5 billion charge to cover expenses linked to investigations and suits over Avandia.
