Glaxo Ordered to Pay $2.5 Million for Paxil Defects

-Bloomberg

10/13/2009 - GlaxoSmithKline Plc must pay $2.5 million over claims that its Paxil antidepressant caused birth defects, a Pennsylvania jury concluded in the first of 600 such cases to come to trial.

Jurors in state court in Philadelphia deliberated about seven hours over two days before finding Glaxo failed to properly warn doctors and pregnant users of Paxil’s risk. The panel awarded $2.5 million in compensatory damages to the family of Lyam Kilker. The 3-year-old was born with heart defects his mother blamed on the drug.

“The first win is always huge, especially when you get a jury saying the drug caused the injury,” Sean Tracey, the family’s lawyer, said in an interview after the verdict.

It’s the first time a jury has considered claims that Glaxo, the U.K.’s largest drugmaker, knew Paxil caused birth defects and hid the risk to increase profits. The drug, approved for U.S. use in 1992, generated about $942 million in sales last year, or 2.1 percent of Glaxo’s total revenue.

The company disagrees with the verdict and will appeal, Kevin Colgan, a spokesman, said in an e-mailed statement.

‘Scientific Evidence’

“While we sympathize with Lyam Kilker and his family, the scientific evidence does not establish that exposure to Paxil during pregnancy caused his condition,” Colgan said.

Glaxo’s provision for legal and other nontax disputes as of June 30 was 1.7 billion pounds ($2.8 billion), it said in a July 22 regulatory filing that didn’t mention the Paxil litigation.

“I don’t think the link is proven, so there will likely be collective settlements which will keep costs low,” Navid Malik, an analyst at Matrix Corporate Capital in London with a buy rating on the stock, said in an e-mail. “If this was a threat to GSK, the first verdict might have been 100 times greater.”

Glaxo American depositary receipts, each representing two ordinary shares, fell 9 cents to $39.69 at 4:02 p.m. in New York Stock Exchange composite trading, after dropping as much as 1.4 percent when the verdict was announced. Glaxo dropped 14 pence, or 1.1 percent, to 1,246.5 pence in London.

Heart Defects’ Cause

In the Kilker case, jurors found 10-2 that Glaxo officials “negligently failed to warn” the doctor treating Lyam’s mother about Paxil’s risks and concluded the medicine was a “factual cause” of the child’s heart defects.

Juror Joe Mellon, who voted for Kilker, said Glaxo didn’t conduct adequate studies on Paxil.

“There were a couple of what I thought were safety signals and what the plaintiffs presented as safety signals that they should have maybe looked into further,” Mellon said after the verdict was announced.

The Philadelphia Common Pleas Court panel also found that Glaxo’s handling of the drug wasn’t “outrageous,” meaning the family couldn’t seek punitive damages against the drugmaker.

Jurors awarded the family more than double the $1.2 million they had sought for Kilker’s past and future medical care and other damages caused by the heart defects.

Glaxo is also fighting suits in the U.S., Canada and the U.K. over claims that Paxil, whose generic name is paroxetine, causes homicidal and suicidal behavior. The company settled some suicide claims, under undisclosed terms.

In 2004, the drugmaker agreed to pay the state of New York $2.5 million to resolve claims that officials suppressed research showing Paxil may increase suicide risk in young people. The settlement required Glaxo to publicly disclose the studies.

In 2001, a jury in Cheyenne, Wyoming, ordered Glaxo to pay $6.4 million to the relatives of a man who shot his family to death and then turned the gun on himself after taking Paxil. The case was settled while on appeal, according to Glaxo’s Colgan.

The Philadelphia case is Kilker v. SmithKline Beecham Corp. dba GlaxoSmithKline, 2007-001813, Court of Common Pleas, Philadelphia County, Pennsylvania ( Philadelphia).

If you are currently taking Paxil and have concerns about its safetly, you should consult with your doctor regarding your treatment options. Under no circumstances should you discontinue taking any medication, including Paxil, without first consulting with your doctor. For Paxil legal information contact the Paxil Attorneys of Ennis & Ennis, P.A. by filling out our free Paxil case evaluation form or by calling the toll-free number listed below.