The link between heart attacks and the diabetes drug Avandia sparked thousands of lawsuits across the country, including a heart attack death suit that was scheduled to go to trial earlier this week. In the hopes of avoiding a large jury award, drugmaker GlaxoKlineSmith agreed to settle the case on the eve of trial for an undisclosed amount.
The lawsuit involved James Burford, an Avandia user from North Carolina who died in 2006. His lawsuit was the first to go to federal court and would likely have resulted in a substantial jury award against Britain's biggest drugmaker. Although Glaxo used legal tactics to avoid the risk in this case, it still faces another 2,000 lawsuits alleging that the company hid Avandia's health risks.
Sales of the popular diabetes drug plummeted in 2007 when researchers exposed its connection to heart attacks. In response, European regulators pulled the drug from the market and American regulators significantly curbed its use.
Expenses linked to investigations and suits over Avandia have already taken a financial toll on the company. The $6.4 billion that Glaxo set aside to cover legal costs and federal prosecutor probes is expected to wipe out yearly profits.