A week and a day after the nation’s leading medical journal announced that Avandia poses a much higher heart attack risk than either its maker, GlaxoSmithKline, or FDA had previously reported, the media dustup has come nowhere near peaking. Meantime, analysts are already revising-downward-the damage to GSK’s blockbuster anti-diabetes drug in the face of what appears to be a rush to switch on the part of doctors and patients. 

Citing an abrupt drop in Avandia prescriptions last week, Deutsche Bank experts announced, “This reaction is far worse than we had anticipated and suggests that there could be as much as 22 percent downside risk to Glaxo’s near-term earnings…[and] a still further downside to GSK’s share price.”

Using data from market research firm ImpactRx, Deutsche Bank said that Avandia’s share of new oral-diabetes scripts dropped to near zero from 10 percent in the two days following the May 21 

 report, while Actos, Takeda Pharmaceutical’s PPAR-class rival, saw its share jump from 10 percent to 22 percent. Moreover, the analysts said that there were three times as many switches as usual. (In a Wednesday update, ImpactRx's CEO, Richard Altus, issued a strongly worded objection to Deutsche Bank's interpretation, calling its conclusions “premature.”.)

Shares of GSK stock plummeted to a two-year low following the news, but the British drug giant yielded no ground, downplaying the data just as it has the entire episode. “Two days of data is not enough to reach sensible conclusions on the trend for Avandia new prescriptions,'' Glaxo said in an e-mailed statement.

Avandia is the firm’s second-biggest seller (after anti-asthma Advair), and its $3.2 billion sales in 2006 were projected to top $4 billion this year. But that was before Dr. Steve Nissen of the Cleveland Clinic got his hands on the 42 Avandia studies that GSK, in a nod to transparency, had posted on its Web site. Nissen’s meta-analysis found that diabetics who took Avandia had a 43 percent increased risk of heart attack than those on other drugs. Although Avandia was approved in 1999 and has been used by some 7 million patients, the 

 viewed these findings as urgent enough to warrant release several weeks before publication. FDA issued an immediate alert, and the press pounced.

While it is way too early to predict the extent of the harm to the franchise, few analysts agree with Glaxo head JP Garnier’s rosy picture for his rosiglitazone. “We expect that once the complete data set on Avandia becomes available, our product will be vindicated,” Garnier said in a shareholder meeting last week. 

But Morgan Stanley’s Andrew Baum sees little hope of Avandia recovering its pre-Nissen punch, putting its 2010 sales at $2.4 billion, half of previous estimates. 

And if Actos looks like the winner for the moment, most analysts also agree that Merck’s Januvia will be the big benefactor of Avandia’s spoiling. “Switching to Actos is probably a stopgap measure,” said Miller Tabak’s Les Funtleyder. “When the dust settles, the whole class of PPARs may well be implicated-if not by the data, then by the press. Januvia and other DDP-4 inhibitors will emerge as the safer alternative.”

And when the dust settles, will Avandia be Vioxx 2? Despite the outcry in Congress and plans for hearings at which JP Garnier and FDA officials will testify, Funtleyder says fuhgedaboutit. “Vioxx was a mass-market painkiller that caused heart attacks, while Avandia is for diabetics, many of whom are already seriously ill. The risk/reward profiles are completely different.” 

Tell that to Cleveland Clinic’s Nissen, whose drug-safety crusade toppled Vioxx.

Articles

News Analysis

A week and a day after the nation?s leading medical journal announced that Avandia poses a much higher heart attack risk than either its maker, GlaxoSmithKline, or FDA had previously reported, the media dustup has come nowhere near peaking. Meantime, analysts are already revising?downward?the damage to GSK?s blockbuster anti-diabetes drug in the face of what appears to be a rush to switch on the part of doctors and patients.

How Far Will Avandia Fall?

In an effort to clamp down on corruption, China sentenced its former top drug regulator to death on Tuesday.

Zheng Xiaoyu, who served as director of China’s State Food and Drug Administration (SFDA) from 1997 to 2006, was convicted on several counts of bribery. According to Chinese newswire Xinhua, Xiaoyu accepted gifts totaling nearly $850,000 from eight unnamed pharmaceutical companies to approve their drugs. 

"(Zheng's acts) greatly undermined the integrity of an official post and the efficiency of China's drug monitoring and supervision, endangered public life and health, and had a very negative social impact," Xinhua quoted the Beijing Municipal No. 1 Intermediate People’s Court as saying.

Much like the old Chinese proverb, this might be a case of killing the chicken to scare the monkey. The weighty sentence, says one anonymous insider, was delivered as a fear tactic-not because the drugs might have killed people. The Chinese SFDA is strictly in the business of approving drugs, while quality control is left to the General Administration of Quality Supervision, Inspection, and Quarantine. 

“This isn’t the first time an official has received the death penalty in China,” says J. Benjamin Bai, a principal at international law firm Jones Day. “This might be shocking to the Western world because in the United States, politicians don’t get their heads cut off because of corruption.” Bai admits, however, that executions aren’t the norm. Typically, high-ranking officials are forced to vacate their position or pay restitution.

The Chinese court said that manufacturers of the six drugs approved by Zheng had provided fake documentation when seeking approval. The Associated Press reported "one antibiotic approved by Zheng's agency killed at least 10 patients last year before it was taken off the market."

“Situations like these, where fake drugs are approved or poison makes it into pet products, are a huge deal in China,” Bai says. “This type of corruption is not acceptable in China and they are taking it very seriously.”

Pharmaceutical Executive-05-30-2007

How Far Will Avandia Fall?

Death Sentence for China Drug Chief