Sectors: Pharmaceuticals

British big pharma group GlaxoSmithKline (GSK) has informed the market that it will set aside £1.6 billion to cover settlements related to its diabetes treatment, Avandia.

The news follows the US Food and Drug Administration’s recommendation that the drug stay on the market, but should carry with it warnings regarding cardiac risks. Avandia has proved to be a controversial drug, since a 2007 study by cardiologist Steve Nissen linked the medicine to an increased risk of heart attacks. 

In addition to the charge relating to Avandia, once the drug of choice for doctors treating patients with type-2 diabetes, GSK is also setting aside £500 million to pay a settlement pertaining to a US government investigation into allegations of manufacturing deficiencies at its site on the island of Cidra in Puerto Rico.

While GSK wrestled with these issues, Britain’s second-largest pharmaceutical firm, AstraZeneca, came closer to winning approval for its anti-clotting drug, Brilinta.

US advisers to the FDA voted, by seven to one, to recommend approval of Brilinta for patients suffering from either heart attacks or chest pains. This now paves the way for the drug to generate projected sales of around $1 billion by 2014, a revenue stream that AstraZeneca will welcome, given that it is facing a loss of patent protection on a number of its established drugs. However, AstraZeneca will have to wait until September before it can be certain that the FDA will give Brilinta the regulatory nod.