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OBJECTIVE: To systematically review published randomized controlled trials (RCT) evaluating a new topical diclofenac solution (Pennsaid) in patients with osteoarthritis (OA) of the knee. METHODS: RCT were identified by searching electronic data sources as well as by contact with the manufacturer of Pennsaid. Details of study demographics, methodology, quality, and outcomes were analyzed. A metaanalysis evaluating the efficacy and safety of Pennsaid in OA of the knee was performed. RESULTS: Four RCT were analyzed in this systematic review (3 published reports and one published abstract). Mean trial duration was 8.5 weeks. Generally, these RCT were of excellent quality. The mean Jadad quality score was 4.5 out of 5. Many indicators of high quality in a RCT were found in these RCT, including adequate descriptions of the methods used for randomization, blinding, and allocation concealment. In comparison to a vehicle control placebo (VCP), the standardized mean differences (SMD) for the WOMAC pain, stiffness, and physical function subscales, as well as for patient global assessment, were all statistically significant in favor of Pennsaid, with SMD ranging from 0.30 to 0.39. Pennsaid was as safe as VCP, with the only exception that it was more likely to result in minor skin dryness at the site of application (relative risk 1.7). In a 12 week equivalence trial that used the WOMAC subscales to compare treatment response, Pennsaid was as effective as oral diclofenac, but was much better tolerated. CONCLUSION: Pennsaid is an effective topical NSAID in patients with OA of the knee. Apart from minor localized skin reactions, Pennsaid was as safe as VCP. It is not known whether the favorable results of Pennsaid can be extrapolated to other topical NSAID preparations. Pennsaid deserves further consideration when the existing treatment guidelines for OA of the knee are updated.