Up to £1.2 billion could be wiped off GlaxoSmithKline’s sales next year if regulators in America recommend the withdrawal of Avandia, its controversial diabetes medicine, today.

An independent advisory committee to the US Food and Drug Administration (FDA) is to meet in Washington to discuss the drug’s future. Peter Cartwright, pharmaceuticals analyst at Evolution Securities, described the possibility of a Vioxx-style withdrawal of the drug as “the nuclear option . . . It’s more likely they will request the introduction of new warnings and labelling,” he said.

Avandia has been at the centre of controversy since May 21, when a report in The New England Journal of Medicine linked it with a 43 per cent increase in the risk of heart attacks.

If the independent committee does recommend that the FDA withdraw the drug from the American market, Mr Cartwright predicted that GlaxoSmithKline (GSK) would suffer a slide of up 6 per cent in its overall projected pharmaceutical revenues of £20 billion for 2008, a drop of up to £1.2 billion. Avandia generated total sales of £1.4 billion last year.

Mr Cartwright said that if the FDA pulled the drug in the United States, easily the world’s biggest market, GlaxoSmithKline would probably be forced to abandon the product globally.

However, the introduction of stricter warnings would also hamper sales by encouraging doctors to prescribe alternative products.

The 20-plus members of the FDA committee will be asked to vote on two separate issues; first, whether they believe that Avandia raises the risk of heart attacks; and secondly, whether the overall risk-benefit profile of the drug justifies keeping it on the market.

GSK has mounted a robust defence of Avandia and has raised questions about the methodology used in the “meta-analysis” published in The New England Journal of Medicine. It plans to present new data that it claims show that the drug’s safety profile is no different from other drugs in the same class, such as Actos, made by Takeda, of Japan.

Further evidence emerged on Friday of the drug’s allegedly potentially harmful effects. A report from the University of East Anglia said that up to one in fifty British patients taking both Avandia and Actos over a period of 26 months would have to be admitted to hospital for heart failure.

Aside from the direct impact on sales, GSK is also facing the possible threat of costly litigation from users of the drug who claim to have suffered heart problems. David Vermont, a lawyer with Ashcraft & Gerel in Washington, one of several American law firms preparing legal action against GSK, said that it had already screened up to 300 inquiries from Avandia patients and their families, 80 per cent of whom he said had experienced heart attacks. “We are getting calls and referrals every day — twice as many as we would have expected,” Mr Vermont told The Times.

Avandia has been taken by an estimated six million people worldwide since its launch in 1999 and the market for diabetes drugs is growing fast, particularly in the US. One in three Americans born in 2000 will develop diabetes during the course of their lifetime, should present trends continue, the American Diabetes Association believes.

In 2002, the annual direct cost of diabetes in the United States was estimated at $92 billion, with another $40 billion from related problems.

Larry Deeb, of the association, said: “There are about 20 million diabetes sufferers in the US, around 7 per cent of the population. But treatments for them take up between 10 and 15 per cent of the US healthcare bill. If the numbers of diabetics rise again, as we predict they will, that would bankrupt the [healthcare] system.”

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