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Diabetics are still being prescribed a drug called rosiglitazone, or Avandia, despite New Zealand's medicine regulator Medsafe knowing it increases the risk of heart disease and bone thinning.
The diabetes drug is used to improve response to insulin.
The drug is available on prescription in New Zealand, but it is believed its use is limited to about 400 people.
Earlier, Medsafe said they knew Avandia was associated with a risk of heart attack and heart failure, particularly when used with insulin.
Because of the risks, the drug should not be started as add-on therapy to patients already receiving insulin as part of their treatment regimen.
Medsafe said they expected GlaxoSmithKline, which markets Avandia, to issue a "black box" warning that says the drug could cause chest pain or heart attacks.
Now research in the United States has also raised the possibility that long-term treatment with Avandia could lead to osteoporosis due to a higher instance of fractures from thinner bones.
Medsafe's acting interim manager Derek Fitzgerald said this week that they would also add warnings about the increased risk of bone thinning from long-term use of the drug.
Mr Fitzgerald said Medsafe and the Medicines Adverse Reactions Committee (Marc) had been monitoring the class of medicines that Avandia belonged to.
At a meeting in September, Medsafe and Marc concluded that while Avandia still had a role in the management of diabetes, the safety of the medicine needed to remain under ongoing review.
"Prescribers are required to weigh the benefits and risks before prescribing a medicine - including the patient's medical condition and possible adverse reactions," Mr Fitzgerald said.
In the meantime, US medicine watchdog, the FDA, said doctors should monitor patients closely for any heart effects.
The drug has been under scrutiny since a US analysis last May linked Avandia to a 43 per cent higher risk of heart attack in patients.
- NZPA