GSK: Feds, states launch Avandia probes

The Avandia mess weighed on GlaxoSmithKline's third-quarter earnings, that's now a matter of record. But it's not over yet; also now a matter of record are the subpoenas GSK has received from the Department of Justice. Several U.S. states are also considering suing the company, and new claims from patients hit the courts regularly.

Avandia, the once-top-selling diabetes drug, has been plagued by safety concerns since 2007. After several years of weighing data and more data, regulators in Europe chose to pull the drug off the market completely, while FDA put severe restrictions on its use. The company won't market the drug anymore, either. GSK wrote off supplies of the drug--$233 million worth--because they'll never see the light of day.

Justice's subpoena involves GSK's development and marketing of Avandia, the company says; as the Wall Street Journal notes, it's unclear whether the probe is criminal or civil. No doubt the feds will be looking into allegations the company kept safety concerns about the drug under wraps. GSK maintains that it handled Avandia worries appropriately.

The company said it has also received "civil investigative demands" from states attorneys general about Avandia's development and marketing. Then there are the patient suits; GSK says it doesn't yet know whether it needs to set aside more money to cover eventual liabilities from the drug. This legal battle has only just begun.

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