GlaxoSmithKline Down Slightly After Johnson & Johnson Allergy Ad Settlement

March 31, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

GlaxoSmithKline will settle a lawsuit by Johnson & Johnson for undisclosed terms, after the drugmaker accused it of using false advertising to boost allergy spray Flonase in an attempt to gain market share at the start of the American allergy season.

The settlement reached Monday in Manhattan federal court appeared to satisfy both companies, who said in separate statements that the decision was “mutually acceptable and amicable.”

The U.S. Food and Drug Administration (FDA) granted Glaxo permission to sell Flonase over the counter last July, meaning other competitors in the allergy market are zealously guarding their territory.

The agreement came two weeks after two Johnson & Johnson units, McNeil-PPC Inc and McNeil Consumer Healthcare, filed the lawsuit alleging false advertising in U.S. District Court in Manhattan. That suit had sought an injunction against an ad Glaxo was running on television that claimed Flonase “outperforms the No. 1 allergy pill, which the ad does not name, and controls six allergy symptoms versus one by the other pill.”

Johnson & Johnson’s McNeil unit makes the top selling allergy drugs Benadryl and Zyrtec. McNeil protested that studies have not supported Glaxo’s claims and it went to court to prove it. Its suit also claimed the ad was priming consumers to see Flonase as the market leader and sought an injunction "with the prime allergy sales season quickly approaching."