Healthy Skepticism Library item: 10935

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Publication type: news

Cortez MF, Rapaport L.
Glaxo's Avandia Pill Faces FDA Warning, Doctor Revolt
Bloomberg News 2007 Jul 19
http://www.bloomberg.com/apps/news?pid=20601087&sid=ay0JviGdMOT0&refer=home

Full text:

July 19 (Bloomberg) — GlaxoSmithKline Plc’s Avandia, tainted by reports linking the drug to increased heart attack risks, may face a long-term decline in use even if U.S. regulators find the diabetes pill is safe.

In May, researchers reported that Avandia, Glaxo’s second- biggest revenue producer, may increase chances of heart attacks by 43 percent. Since then sales have slumped as doctors turn to other medicines, and shares of London-based Glaxo have dropped 13 percent, wiping out $23 billion of market value.

Doctors and analysts say the company can’t campaign against the researchers’ claim of side effects unless the drug can pass a U.S. Food and Drug Administration review July 30. Already, American insurers are considering restrictions on the drug’s use and plaintiff lawsuits are emerging. Analysts now forecast that even if the FDA rules favorably, sales in four years will be 35 percent less than they had estimated two months ago.

``Avandia itself is going to struggle whatever happens,’‘ said Mike Ward, an analyst at Nomura Code Securities in London. ``Whether it ever bounces back, even if the advisory committee is relatively kind, it’s going to take time.’‘

American depositary receipts of Glaxo, each representing two ordinary shares, gained 68 cents, or 1.3 percent, to $52.97 at 4:21 p.m. in New York Stock Exchange composite trading. In London, Glaxo shares rose 1.4 percent to close at 1,287 pence. The company is the fourth-worst performer this year out of 13 companies in the Bloomberg Europe Pharmaceutical Index.

An analysis of Avandia studies published yesterday in the Cochrane Library, a nonprofit review of medical treatment based in Oxford, England, found the drug doesn’t improve patients’ health and contributes to weight gain, swelling and heart risks.

Presenting Data

Chris Viehbacher, president of Glaxo’s U.S. pharmaceuticals unit, said the drugmaker is looking forward to presenting data to the FDA from 116 studies involving more than 50,000 people and showing no increased heart attack risk.

``One of the frustrating things is being able to explain the story,’‘ he said in a July 16 interview. ``It’s really like trying to shout in a windstorm.’‘

For now, doctors are reaching instead for Takeda Pharmaceutical Co.‘s Actos, a pill that works in the same way without the heart attack risk, or newer medications from Merck & Co., Eli Lilly & Co. and Amylin Pharmaceuticals Inc. For patients who need a drug to help their body use the hormone, about 1 in 4 are now given Avandia, according to Verispan LLC in Yardley, Pennsylvania, which tracks pharmaceutical data.

Earnings Hit

Glaxo’s second-quarter earnings, to be released July 25, will take a hit from the Avandia decline, Nomura Code’s Ward said.

Ultimately, Avandia will be vindicated, Viehbacher said.

``The data are very compelling here, that there is no safety issue,’‘ he said. ``And we have the data to show that this is actually a better medicine for treating type 2 diabetes. That’s a compelling value proposition that we will be able to continue to build upon post the FDA.’‘

Glaxo has been working behind the scenes and trying to reach out directly to patients. In its ads, run in papers including the New York Times and USA Today, the company said it stands behind its medication. Glaxo also sent letters to lawyers trolling for cases among Avandia users, warning them to pull advertisements the drugmaker contends are false.

The solicitations are ``misleading and deceptive because they convey an unwarranted sense of danger to patients,’‘ according to a letter obtained by Bloomberg that was sent by Pepper Hamilton LLP, a Philadelphia law firm, to plaintiffs’ lawyers on behalf of Glaxo.

Lawsuit Estimate

Plaintiffs’ suits may reach 15,000 to 20,000, said Mark Lanier, a Texas lawyer who won the first verdict against Merck & Co. over claims against the painkiller Vioxx. Merck withdrew its product in 2004 after a company study linked it to elevated risk of heart attacks and strokes.

Glaxo is taking a low-key approach with doctors. It was nearly silent on the heart attack issue at the American Diabetes Association’s meeting in June, a missed opportunity to plead its case, said Gerald Meyers, a professor at the University of Michigan Ross School of Business, in an interview.

A 10-minute, 3-D movie playing in the ``Avandia Vision Theater’‘ at the Glaxo exhibit during the meeting took viewers through the damage done by diabetes and explained how the drug makes the body more sensitive to insulin, the hormone that helps cells turn glucose, or blood sugar, into energy. The film didn’t mention heart attacks or cardiac complications.

The theater could accommodate dozens of viewers and was in the middle of Glaxo’s exhibit space, festooned with banners, 5- foot posters and dozens of tables filled with pens, pads and papers about the company’s products.

Free Popcorn

Visitors got free popcorn and reprints of a study called Adopt that was published in the New England Journal of Medicine in December and showed that Avandia controlled blood sugar better than other therapy.

Kiosks played U.S. Congressional testimony June 6 by Moncef Slaoui, chairman of research and development at Glaxo, defending the drug’s safety and the company’s actions.

The critical question is what the FDA will ultimately do. While recalling Avandia is an option, analysts say the agency’s panel of outside advisers probably will recommend a change in the drug’s prescribing information.

``The FDA meeting clearly is a seminal event,’‘ said Peter Cartwright, a financial analyst at Evolution Securities in London. ``A lot of physicians, certainly, are going to wait for that because they see guidance from U.S. regulators as key to their prescribing habits going forward.’‘

``The challenge for Glaxo is to restore the confidence in physicians in Avandia as a drug,’‘ Cartwright said.

Estimate Cut

Nomura Code’s Ward said he forecast Avandia sales of 3 billion pounds ($6 billion) by 2011 before the heart attack link in May. Now he says the drug may generate 1.9 billion pounds.

Doctors say Glaxo isn’t using a hard-sell to boost prescriptions now. The company’s marketing people are talking mainly about other products, including an experimental cervical cancer vaccine recommended for approval in Europe yesterday.

``It’s not Glaxo that can defend it, not a chance,’‘ said Marc Siegel, an internist at New York University Medical Center, who continues to prescribe Avandia and says he believes in its safety. ``Drug companies make it worse when they try to address these issues. They aren’t the best scientific resource,’‘ said Siegel, who has met with Glaxo salespeople several times since the heart-risk allegations surfaced.

The FDA’s stance on Avandia will determine whether insurance companies covering 160 million Americans will continue to make the drug widely and inexpensively available. A warning in the drug’s prescribing information highlighted in a black box, the strictest possible, may lead insurers to raise patients’ out-of- pocket fees for the pill or insist that doctors get prior authorization to write prescriptions.

Insurance Companies

Two insurers, WellPoint Inc., based in Indianapolis, and Cigna Corp., based in Philadelphia, are conducting their own reviews or waiting for the FDA.

``We are following the review process carefully,’‘ said John Poniatowski, vice president for coverage policy at Cigna, the fourth-largest U.S. insurer.

The complicated scientific and regulatory issues may make it difficult for a long time for Glaxo to communicate clearly about the benefits of Avandia, said Lisa Bolton, assistant professor of marketing at the University of Pennsylvania’s Wharton School in Philadelphia.

``Evidence suggests it is very hard for companies to come back after damaging information, once it’s out there,’‘ Bolton said. ``The uncertainty hangs over you. Frankly, there is not a lot of trust in pharmaceutical companies or business in general.’‘

To contact the reporters on this story: Michelle Fay Cortez in Minneapolis at mcortez@bloomberg.net ; Lisa Rapaport in New York at Or Lrapaport1@bloomberg.net