Glaxo details cost of drug halt

Drugs giant GlaxoSmithKline revealed today that a dispute over its best-selling anti-depressant had cut its sales growth in the United States by more than half.

Glaxo said pharmaceuticals sales in the US would have grown by 7% between April and June rather than 3% had federal authorities not forced it to halt supplies of Paxil CR in March.

The dispute centred on allegations by US authorities that Glaxo’s manufacturing standards violated national rules and also led to the forced withdrawal of diabetes treatment Avandamet in the US.

Avandamet was kept off the shelves of pharmacies for four months although Glaxo said it had since managed to recapture 59% of its previous share of weekly prescriptions.

Final issues over both drugs were resolved last month when Glaxo told investors that it had identified the source of the problems in manufacturing and had taken remedial action.

Details emerged as Glaxo said European and international sales of its pharmaceutical products improved 6% during the second quarter to €6.5bn.

This meant revenues in 2005 so far were up 5% at €14.9bn, while pre-tax profits for the first half increased 16% at constant exchange rates to €5bn.

Chief executive Jean-Pierre Garnier said sales growth across its regions was being led by its Seretide and Advair asthma treatments, while other products such as Coreg for treating heart disease were also performing strongly.

“Importantly, our pipeline momentum also continues,” he said. “This quarter we launched two new products, confirmed the potential of our outstanding vaccines pipeline and made good progress in the development of promising new treatments for HIV.”