Possible legal action – Quote from 10 years ago

• Sarah Boseley, health editor
• The Guardian, Monday 10 December 2001 10.15 GMT

More than 60 people in Britain who say they have become hooked on the anti-depressant Seroxat – a drug in the Prozac class – are exploring the possibility of legal action against the pharmaceutical company which they claim failed to warn doctors that that it could create dependency.

Two firms of solicitors say they already have between 30 and 40 cases each. The people have come forward following news of a legal case in the US in which 35 people allege they suffered severe side-effects when they tried to stop taking the drug.

The Los Angeles law firm Baum, Hedlund, Aristei, Guilford and Schiavo – which filed its action against the British manufacturers GlaxoSmithKline in September – has since had more than 2,000 calls from people to tell of their addiction to the drug, which is known in the US as Paxil. The side-effects they suffer when they try to stop taking the tablets, include jolting pains in the head, vertigo, loss of coordination, abdominal discomfort, agitation and confusion.

The US lawyers have asked GSK to set up treatment centres to help people attempting to withdraw from Paxil/Seroxat. GSK say there is no reliable scientific evidence that the drug causes addiction or dependency.

The British solicitors, Ross & Co, based in the Wirral, and Hugh James Ford Simey of Cardiff, have been receiving calls from people who did not realise that others had suffered the same symptoms when they tried to cut down and come off the drug.

“We have been contacted by 30 to 40 people, most of whom have startlingly similar tales to tell of being put on the drug and being taken off it, and then going back on,” said Mark Harvey of Hugh James Ford Simey.

Mr Harvey said most people are told by the doctor that their problems are the symptoms of their depression re-appearing and do not suspect that the drug might be to blame. “This does have the smell of something that is a problem,” he said. “The patient information sheet says it is not addictive twice.”

Graham Ross, of Ross & Co, thinks that there is a good potential case against the manufacturers. “So far as evidence of dependency is concerned, that is pretty strong,” he said.

“I feel we can prove that. Failure to ensure that GPs are aware of that risk and therefore warn patients accordingly – there is plenty of evidence that they are not doing that.”

But group actions face particular problems in Britain. Attempts to litigate against the makers of benzodiazapines – including Valium, Librium and Ativan, which were also said not to be addictive when they were launched – collapsed because the legal aid granted to the claimants was used up in the lengthy investigations of the cases demanded by the companies before the action reached court.

Researchers call on journal to retract notorious Paxil study

The retraction of questionable scientific papers seems to be on the rise, due in large part to increased media scrutiny of scientific misconduct and conflicts of interest among researchers who fail to disclose they have skin in the game, i.e. lucrative financial ties to the drug and medical device companies whose products they are studying. Indeed, retractions are becoming so common that Ivan Oransky,executive editor of Reuters Health News, has started a popular new blog called Retraction Watch.Sad to say, actual retractions may be the tip of the iceberg. Consider the 2001 study of Paxil in adolescents, the subject of the book, Side Effects. According to a recent article in theBritish Medical Journal, two academic researchers have called on the journal that published the Paxil trial, known as study 329, to retract it because of the way its authors manipulated and omitted data to make Paxil look safer and more effective in adolescents than it really was. As I reported in Side Effects and subsequent blogs, Dr. Martin Keller, then chief of psychiatry at Brown University and the lead author of this study, miscoded several teenagers who had become suicidal as a result of taking Paxil as being noncompliant instead of as developing adverse side effects from the drug. In addition, Keller and his co-authors concluded that Paxil was effective in treating depression when in fact the drug was not more effective than a placebo on either of the two primary outcome measures of the study and most of the original secondary outcome measures.

As the BMJ article notes:

The drug only produced a positive result when four new secondary outcome measures, which were introduced following the initial data analysis, were used instead. Fifteen other new secondary outcome measures failed to throw up positive results.

It is important to note here that Keller, along with most of the co-authors of this paper, had lucrative consulting or speaking arrangements with GlaxoSmithKline, the maker of Paxil, the full extent of which they failed to disclose when the paper was published. Indeed, as I reported in Side Effects, the 2001 paper itself was ghost-written by Scientific Therapeutics Information (STI), a medical company hired by GlaxoSmithKline and the same one that helped the former psychiatry kingpins Charles Nemeroff and Alan Schatzberg write an entire psychiatric textbook promoting Paxil, according to the New York Times.

Even though peer reviewers for the Journal of the American Academy of Child and Adolescent Psychiatry said that the results of study 329 did not show efficacy for Paxil and had a host of other methodological problems, the journal accepted the study for publication anyway. One wonders whether the fact that one of the co-authors, Dr. Graham Emslie, was on the journal’s board at the time had anything to do with its precipitous publication in July 2001.

Before making the decision to put black box warnings about increased suicidal risk of Paxil and antidepressants in children and young adults in 2004, the FDA looked closely at study 329 and concluded that its conclusions were indeed misleading and did not demonstrate the drug’s efficacy over placebo; read about this here.

Two academic researchers, Dr. Jon Jureidini,associate professor of psychiatry at the University of Adelaide, and Leemon McHenry, lecturer in philosophy at California State University, are now calling for the retraction of this study, which was used by Glaxo to heavily market Paxil to doctors treating depression in children and adolescents.

As the BMJ piece notes, the Committee on Publication Ethics (COPE) recently advised journal editors to retract a paper if “they have clear evidence that the findings are unreliable.” If any published paper fits this category, study 329 does.

Glaxo Stung by Legal Bill

GSK shareholders are hit by costly legal settlements.

If big really is beautiful, then you don’t get much more attractive than pharmaceutical giantGlaxoSmithKline

Glaxo the global giant

By any measure, GSK is a powerhouse. The world’s fourth-largest drug-maker recorded annual sales of over £28 billion in 2009 and posted a post-tax profit of £5.7 billion. GSK employs nearly 100,000 people and paid over £2.2 billion in corporate taxes last year, so it’s one of the biggest corporate contributors to HM Treasury’s coffers.

Furthermore, with a market capitalisation of over £61 billion, the blue-chip firm’s shares are very widely held, featuring at the heart of many UK-focused portfolios, both private and institutional. So, when GSK stumbles, it has an impact on millions of investors.

A £2 billion setback

One such stumble happened earlier this week, after it was announced that GSK is to record a charge of £2.2 billion (or £1.8 billion after tax) due to additional legal costs incurred in 2010.

This legal charge relates largely to an ongoing US investigation into the sale and promotion of diabetes drug Avandia. Following concerns about raised cardiovascular risk among Avandia patients, the drug has been largely withdrawn from prescription in America and Europe. As you’d expect, this partial withdrawal has triggered a flurry of product-liability lawsuits, especially in the famously litigious US.

Legal side effects

Of course, this isn’t the first time that GSK has had to dig deep to meet big bills arising from legal disputes and regulatory fines. In the world of ‘Big Pharma,’ multi-billion-dollar settlements for product-liability cases are almost as common as the side-effects these drugs sometimes cause.

In common with other regulators, the US Food and Drug Administration (FDA) and the European Medicines Agency have become far more hands-on when enforcing pharmaceutical safety. Hence, recent years have seen a notable increase in the number of enforced product withdrawals, ‘black box’ safety warnings, and huge fines for regulatory breaches.

Indeed, in its last set of annual results, GSK had already set aside nearly £1.6 billion for legal charges covering Avandia and antidepressant Paxil. This sum also included £500 million stemming from manufacturing problems at a former GSK plant in Puerto Rico which was closed in 2009.

A bitter pill to swallow

In some pharmaceutical circles, such legal charges are seen as an almost inevitable price of launching blockbuster drugs into the lucrative US and European markets.

Obviously, GSK shareholders will welcome the company’s attempts to make proper reserves for new Avandia claims in the US. Then again, £2.2 billion before tax is a bitter pill to swallow, as this record-breaking charge will wipe out Glaxo’s fourth-quarter profit. What’s more, this charge is only a ‘reasonable estimate,’ so it could rise or fall in future.

Nevertheless, GSK’s shares closed at 1,182p on Tuesday, down almost 5% from the 1,240p they traded at before this surprise announcement. This represented a £3 billion drop in GSK’s market capitalisation.

Has Mr Market over-reacted?

Given that the drop in GSK’s value exceeds the expected loss by a wide margin, some investors will take the view that the market has over-reacted. On the other hand, critics will argue that announcing such a large loss provision out of the blue suggests that, at best, GSK needs to improve its communication. At worst, investors will fear reputational damage to the company from yet another run-in with the FDA.

Even so, on a price-earnings ratio of around 10 and a dividend yield above 5% (covered twice), GSK displays some well-worn value characteristics. In addition, the company has a rock-solid balance sheet and throws off cash in the billions.

However, this charge — approaching a quarter of 2010’s total profits — could spell an end to GSK’s aggressive share-buyback scheme, during which the company has retired hundreds of millions of shares. Likewise, lower cash reserves could lead GSK to trim its dividends, although I don’t expect this to happen. After all, GSK’s annual dividend climbed by 36% between 2001 and 2009 and rose in each of these years.

In my view, this legal setback, while non-trivial, is only a small part of the big picture. Far more important is GSK’s cost-cutting and its stated goal to move away from ‘white pills and western markets’. If these initiatives succeed by growing earnings, then we should see an upward re-rating of GSK shares.

 

Legal No-Go Area

Is this fair?

The BBC has been told that Legal aid cuts will make it impossible to challenge pharmaceutical companies in the courts.

The government plans to cut the legal aid budget by £350m which means lawyers representing claimants against drug companies will be unlikely to get funding in England and Wales.

The current alternative is a mixture of no-win no-fee agreements with lawyers, and insurance against a patient losing and being liable for the winning side’s substantial costs.

The government is currently consulting on its proposals and insists reforms will be fair.

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Thank you.

GSK pays out $136,000 drug settlement

AG: Vermont to receive $136,000 drug settlement – Bloomberg.