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AstraZeneca's $6B Stomach Ache: Nexium Causes Bone Fractures

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?

This 2006 study in the Journal of the American Medical Association describes the increased risk:

  • 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
The suit was filed by Ginny Begin, 58, who used Nexium between 2003 and 2011. In 2005 she broke her leg while walking. In 2007 she broke the same same bone going down a flight of stairs. Three bones in her ankle also shattered.

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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Images by Flickr users Rennet Stowe and I'm fantastic, CC.