Glaxo ordered to pay $2.5m in first of 600 Paxil cases
PHILADELPHIA (Bloomberg) — 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 three-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 UK's largest drugmaker, knew Paxil caused birth defects and hid the risk to increase profits. The drug, approved for US 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.
"While we sympathise 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 ($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."
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.
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 US, Canada and the UK over claims that Paxil, whose generic name is paroxetine, causes homicidal and suicidal behaviour. 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 Colgan, the Glaxo spokesman.