AstraZeneca (AZN) has allegedly known since 2006 that Nexium, its top-selling drug, puts users at an increased risk of bone fractures but failed to warn patients of that until 2010.
Millions of people use Nexium, its sister drug Prilosec, or other generic proton pump inhibitors, to control heartburn and acid reflux. But how many of them also know that the risk of hip fractures in the over-50s rises alarmingly if you take the drug on a daily basis?
- Period of PPI use: increased fracture risk
- 1 year: 22 percent
- 2 years: 41 percent
- 3 years: 54 percent
- 4 years 59 percent
- More than 1 year: 44 percent
- "Long term" use: 165 percent
If Begin's allegations are true -- and the FDA added fracture warnings to Nexium in 2010 and again this year -- the size of the potential liability for AZ is daunting. Nexium is the No.2 best-selling drug in the U.S. by dollars. Generic versions of Prilosec are the sixth most-prescribed drug. AZ earned $5 billion in revenues from Nexium last year and another $1 billion from Prilosec. The "purple pill" is the company's most lucrative drug.
What makes the potential financial liability so great is not just the mind-boggling number of potential plaintiffs; it's the cost of their damages. In addition to pain, suffering and medical bills, third-party payors and insurers could pursue AZ to get reimbursement for the hospitalizations of their premium payors.
That's quite a stomachache. Better take a couple of, er, Tums.
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