GSK to settle 20,000 Avandia claims; deal comes in court-ordered mediation

GlaxoSmithKline (NYSE:GSK) is settling more than 20,000 Avandia cases in a deal reached in court-ordered mediation.

Bloomberg News reports that the British pharmaceutical giant reached the deal last month as part of the company’s efforts to resolve legal issues over the last decade surrounding the former blockbuster type 2 diabetes drug.

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


Avandia came under heavy scrutiny in recent years in the United States and Europe after being linked to higher risks of heart attack and stroke. In 2010, the U.S. Food and Drug Administration and the European Medicines Agency both issued new guidelines strictly limiting the drug. Avandia was suspended in Europe and allowed in the United States only with stronger warnings about the risks, restrictions that all but quashed the drug’s commercial viability.

GSK last November reached a deal with the U.S. government regarding illegal marketing of Avandia and other drugs. The settlement calls for the drugmaker to pay $3 billion to settle criminal and civil claims. That comes on top of $700 million that the company agreed to pay to settle more than 15,000 claims, Bloomberg reported, citing people familiar with the accords. After the federal settlement, GSK faced pressure to settle the remaining Avandia claims.

GSK maintains its U.S. headquarters in Research Triangle Park, North Carolina. U.S.-based spokeswoman Bernadette King told Bloomberg that the most recent Avandia settlement payments will be funded from the company’s existing cash resources.

The deal does not resolve all of the Avandia claims. U.S. District Judge Cynthia Rufe, the Philadelphia judge who appointed the mediator in November, had set a 75-day deadline to resolve 85 percent of the remaining Avandia litigation. Kiesel told Bloomberg it’s unclear whether the 20,000 cases is enough to meet that threshold.