Type-2 diabetes drug Avandia banned in Europe and sidelined in the US

The type-2 diabetes drug Avandia has been banned in Europe and the UAE.  In the United States, stronger restrictions on the drug use have been put in place. Doctors must sign a waiver that they have exhausted all other diabetes remedy options before prescribing Avandia.

The European Medicines Agency’s decision to suspend the drug came after ongoing criticism of the pill in the past few years.

Avandia, the former best selling diabetes pill, has been under heavy scrutiny since 2007 when it was linked to increasing the risk of heart attacks and strokes.  The pill, which is produced by British drug maker GlaxoKlineSmith Ltd, will become unavailable throughout Europe in the coming months.

In 2006, Avandia was the best selling diabetes pill in the world. Sales in 2009 still reached $1.2 billion, however lawsuits and settlements piled up. Glaxo paid out over $460 million in settlements during the month of July and further lawsuits are expected in the coming months. The company will really feel the hit financially in 2011 which is expected to be a slow growth year.

In September analysts at both Panmure Gordon and Jeffries and Co. dropped their estimates rating from “Buy” to “Hold”. Jeffries analyst Jeff Holford indicated that Glaxo’s high operating profit margin which is estimated around 80% could mean that the impact would be greater in the earnings numbers than the sales figures.  As a result, Jeffries dropped their 2011 EPS 4% for the company.

Shares are down 2.6% for Glaxo since Thursday.

1 Comment on "Type-2 diabetes drug Avandia banned in Europe and sidelined in the US"

  1. Diabetes drugs ruin the body and destroy the heart muscle, the drug makers and FDA have known this for years. The drug makers take in 50 Billion$$$ every year from dangerous diabetes drugs, this is why the USA will never ban it

    A filmmaker has been reversing diabetes and obesity in now 10 countries WITHOUT medications and the drug maker do not promote this

    just google SPIRIT HAPPY DIET

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