European regulators said Thursday GlaxoSmithKline's diabetes drug Avandia should be taken off the market but U.S. officials allowed it to stay, with major restrictions due to concerns about heart risks.

The differing rulings were an attempt to bring to an end a bitter row over drug safety that has dogged the reputation of both the medicine and its maker in recent years.

In separate but coordinated statements, the U.S. Food and Drug Administration in Washington and the European Medicines Agency (EMA) in London said they agreed on the risks associated with the drug but had reached different conclusions on action.

Avandia was once Glaxo's second-biggest seller but sales have tumbled in recent years and Glaxo said it expected minimal sales in future.

"The decisions are not surprising, and are a significant negative both for Glaxo and Avandia. It's no longer a very important product for Glaxo, and will become even less so," said Viren Mehta, principal at Mehta Partners.

But Mehta and other analysts said Glaxo would have some protection from further potential U.S. product liability lawsuits now that Avandia will remain on the market in the United States, however limited its sales potential might be.

In Europe, officials at the EMA said the drug's suspension was expected to be formally endorsed by the European Commission within two weeks.

Both Avandia, known generically as rosiglitazone, and its main rival drug Actos, or pioglitazone, made byTakeda Pharmaceutical, are known to raise the risk of heart failure, where the heart fails to pump blood efficiently.

But Avandia has also been linked to an increased risk of heart attacks, following publication of a study in 2007 by Dr. Steve Nissen of the U.S. Cleveland Clinic, whose findings prompted the latest safety reviews by regulators.

Nissen's results, however, have been contested by Glaxo and some other researchers. Dr. Janet Woodock, director of the FDA's Center for Drug Evaluation and Research, said the true risk of heart attack associated with Avandia was unclear.

"As a matter of prudence, we are restricting access. We are not withdrawing the drug at this time because there is considerable uncertainty about this signal and whether or not it's valid," she told reporters in a conference call.

Requiring patients and doctors to meet certain criteria in order to get the drug "means people will think twice" before using Avandia, she added.


Glaxo shares were 1.0 percent lower in U.S. trading by 1630 GMT, having lost as much as 2.6 percent in London ahead of the announcements.

U.S. health advisers recommended to the FDA in July that Avandia be allowed to stay on the market but with additional warnings on its label.

But some European government safety experts, including those in Britain, argued that the risks of Avandia outweigh its benefits and the drug should be pulled from the market.

EMA's senior medical officer Dr. Hans-Georg Eichler said the biggest problem was that heart risks are already very common in diabetes patients, and distinguishing which of them are due to the drugs patients take is extremely tricky.

"We struggled with it, and colleagues in other jurisdictions struggled with it as well," he told reporters.

Annual sales of Avandia reached $3 billion in 2006, but after health concerns emerged in 2007 its sales plunged to $1.2 billion in 2009, or 2.7 percent of group sales, as many doctors switched to Takeda's rival drug, Actos.

Glaxo argues that extensive research has shown Avandia to be safe and effective when used according to the label. But it said it would voluntarily end promotion of Avandia in all countries.

Avandia sales in the first half of 2010 were down 18 percent at 321 million pounds ($503 million), with the United States accounting for 164 million pounds and Europe 72 million.

Glaxo said one-off costs in 2010 associated with Avandia would be approximately 100 million pounds on a pre-tax basis.