As GlaxoSmithKline (NYSE: GSK) defended Avandia before an FDA advisory panel yesterday, its lawyers were making sure that defense doesn't move to a courtroom--in some 10,000 lawsuits, that is. The company agreed to pay about $460 million to settle those suits, which amount to a majority of the Avandia litigation outstanding, Bloomberg reports.
Those lawsuits alleged that the diabetes drug caused heart attacks and other cardiovascular problems--just the outcomes under debate by the FDA committee. Until this settlement, GSK had been facing 13,000 or more claims that it hid Avandia's heart attack risks, UBS analyst Gbola Amusa tells the news service. The company agreed two months ago to pay $60 million to resolve 700 other suits.
The settlement amounts to about $46,000 per plaintiff, far below UBS's worst fears for the company. "This is exceptionally good news given the market has discounted $6 billion in liability," Amusa tells Bloomberg. "We had outlined an absolute worst-case scenario where $500,000 per case would have to be paid."
Lawyers for the plaintiffs praised the deal, saying it's a "prompt resolution" of litigation that's been dragging on for three years already, with the first case finally scheduled for trial in October. "It's a compromise that allows both sides to put this behind them and move on," attorney Michael Miller, who represents some 1,500 patients in the suits, said in a statement. GSK declined comment on pending litigation.