GlaxoSmithKline reportedly agrees $460 million damages settlement over diabetes drug Avandia, as FDA hearings kick off

UK drugs giant GlaxoSmithKline has agreed to pay about $460 million to resolve a majority of law suits alleging the company's type 2 diabetes drug Avandia (rosiglitazone) had caused heart attacks and strokes, reported the Bloomberg news service quoting 'people familiar with the accords,' just as two days of US Food and Drug Administration hearings on the safety of the drug kicked off in Washington DC. The individual settlements are said to range from $46,000 to almost $70,000, depending on the strength of the claims.

The news of the settlement - though not yet confirmed by GSK - was welcomed by the markets, sending the firm's shares up 1.9% to £11.76 by close of London trading yesterday. The drugmaker is facing more than 13,000 law suits alleging that it did not disclose information on Avandia's cardiovascular risks. UBS analysts said the market had priced in a $6 billion liability for settling these claims, which now seem to be significantly lower than had been expected. A worst-case scenario had projected as much as $500,000 per case. GSK itself has made a provision of £2.3 billion ($3.48 billion) for its total legal bill relating to the Avandia law suits.

FDA chief tells advisory committee to 'follow the science'