Who Let the Docs Out?

As The Wall Street Journal reported, GlaxoSmithKline's (NYSE: GSK  ) diabetes drug Avandia found itself back in the news yesterday, after a U.S. senator discovered that Glaxo learned the details of a negative study before they were published.

The negative study in question is the New England Journal of Medicine Avandia safety meta-analysis published last year. It suggested that using Avandia may cause an increased incidence of certain cardiovascular adverse events. Apparently, a peer reviewer of the article sent Glaxo an unauthorized advance copy 17 days ahead of its publication. Now Sen. Charles Grassley of Iowa wants to know what Glaxo did with that information.

Before being published, a scholarly journal article goes through the peer review process, in which its authors solicit additions, corrections, and other suggested changes for the article. Reviewers often include prominent academic members of the field in question, who generally have to agree not to publicly discuss the article or its data before it gets published. Leaking data early is unethical, and it diminishes the importance of the journal.

So why the big wah-wah over a prematurely leaked journal article? Investors and analysts have been a little jittery these past weeks regarding any hint of impropriety among drugmakers. Merck (NYSE: MRK  ) and partner Schering-Plough (NYSE: SGP  ) have been embroiled in their own congressional brouhaha, accused of delaying the release of key data from a clinical study that ultimately revealed negative results about their blockbuster cholesterol drug Vytorin.

Merck and Schering have already been hit by lawsuits regarding the Vytorin data, and of course, nobody has to be reminded of the $4.85 billion settlement that Merck just agreed to pay to resolve alleged Vioxx disclosure issues. All these events have some investors imagining billions of British pounds flying out of Glaxo's balance sheet, should Avandia prompt a similar situation.

Thankfully, Glaxo doesn't appear to have done anything wrong with the document leak. Apparently, the company never tried to distort any data or pressure any investigators in the brief window before the article's publication. While this leak definitely reflects poorly on the reviewer who broke a confidentiality agreement with the New England Journal of Medicine, it's much ado about nothing for Glaxo.

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