Can Avandia cause heart failure?

Yes, it can causecongestive heart failure in some patients.  The FDA specifically issued the following warnings:

WARNING: CONGESTIVE HEART FAILURE

Thiazolidinediones, including rosiglitazone, cause or exacerbate congestive heart failure in some patients.  After initiation of AVANDIA, and after dose increases, observe patients carefully for signs and symptoms of heart failure (including excessive, rapid weight gain, dyspnea, and/or edema). If these signs and symptoms develop, the heart failure should be managed according to current standards of care. Furthermore, discontinuation or dose reduction of AVANDIA must be considered.
AVANDIA is not recommended in patients with symptomatic heart failure. Initiation of AVANDIA in patients with established NYHA Class III or IV heart failure is contraindicated.

WARNINGS: Cardiac Failure and Other Cardiac Effects:

AVANDIA, like other thiazolidinediones, alone or in combination with other antidiabetic agents, can cause fluid retention, which may exacerbate or lead to heart failure. Patients should be observed for signs and symptoms of heart failure. If these signs and symptoms develop, the heart failure should be managed according to current standards of care. Furthermore, discontinuation or dose reduction of rosiglitazone must be considered (see BOXED WARNING). In combination with insulin, thiazolidinediones may also increase the risk of other cardiovascular adverse events. AVANDIA should be discontinued if any deterioration in cardiac status occurs.
Patients with congestive heart failure (CHF) NYHA Class I and II treated with AVANDIA have an increased risk of cardiovascular events. A 52-week, double-blind, placebo-controlled
echocardiographic study was conducted in 224 patients with type 2 diabetes mellitus and NYHA Class I or II CHF (ejection fraction ≤45%) on background antidiabetic and CHF therapy. An independent committee conducted a blinded evaluation of fluid-related events (including congestive heart failure) and cardiovascular hospitalizations according to predefined criteria (adjudication). Separate from the adjudication, other cardiovascular adverse events were reported by investigators. Although no treatment difference in change from baseline of ejection fractions was observed, more cardiovascular adverse events were observed with AVANDIA treatment compared to placebo during the 52-week study.

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