Persuading people to avoid overusing Tylenol and other brands of acetaminophen could reduce the cases of kidney failure in this country by 10 percent and cut medical bills by $700 million a year, a study Thursday concludes.

The study, published in the New England Journal of Medicine, is the second this week to link the popular pain medicine with rare but serious side effects.The study found that people who average a pill a day over the course of a year face double the usual risk of kidney failure, a devastating condition that requires frequent dialysis treatment.

Another report in the Journal of the American Medical Association concluded that in rare instances moderate overdoses can cause severe liver damage if taken on an empty stomach.

Experts say taking Tylenol and similar drugs occasionally for headaches and other ills is safe. But they caution that the reports underscore the need to take medicines - even over the counter drugs - only when necessary.

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"We are really talking about care and caution, not just popping pills at the slightest ache and pain," said Dr. Paul K. Whelton of Johns Hopkins School of Public Health, senior author of the kidney report.

Johnson & Johnson, the parent of Tylenol maker McNeil Consumer Products Co., defended its product and attacked the study.

"We are very concerned this report will unnecessarily alarm the public, scaring people into switching from acetaminophen to other pain relievers that carry greater risks with everyday use," the company said.

About 50,000 new cases of kidney failure are diagnosed in the United States annually, and about 190,000 people are being treated for the condition. The new report estimates that about 10 percent of cases - 5,000 a year - are caused by acetaminophen.

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