Obviously, the fate of GlaxoSmithKline's (NYSE: GSK) diabetes drug Avandia is vital to the company. But it also will mark a defining moment for the Obama administration's FDA, as well as the entire pharma industry.
Avandia has been under scrutiny since 2007, when a study linked the drug to increased cardiovascular risks. Since then, research has been piling up, but it's not only contradictory, it's not all top-quality data. GSK argues that true clinical trials haven't pinpointed the same cardiac risks as some independent analyses have, including those published this week. At this point, there's been no full-on clinical outcomes trial, so the data available has to be weighted and compared.
As Reuters notes, the world is watching the FDA to see just how it weighs that data. It's the first big safety controversy faced by Obama's FDA. And even within the agency, Avandia has its detractors and supporters. Some in Congress are pushing for withdrawal. We have yet to hear from the agency's expert advisors, who meet in mid-July on Avandia, but ultimately it's the agency that has to sift through all the data--and all the recommendations--and make a decision.
If the FDA were to pull Avandia, there could be problems for future drugs with inconclusive safety data. "The ability to get through FDA might be questioned a little bit more if they were to do something pretty dramatic here," Morningstar analyst Damien Conover tells Reuters, adding that he doesn't think Avandia will be banned.