Pharma giant GlaxoSmithKline (GSK) have reportedly set aside funds of GBP2.2 billion in the fourth quarter of 2010 to cover legal costs in the dispute about their diabetes drug, Avandia and other drugs during the period 1997 to 2004. This amount comes on top of the GBP1.75 billion charge that GSK announced last July.
The initial charge last year was to pay a range of legal settlements concerning Avandia, and also the antidepressant Paxil and problems concerning standards at a Puerto Rican factory.
There is an ongoing US federal investigation into the sales and promotional practices GSK used for Avandia, as well as nine other proprietary products which have not been named. The drug was formally restricted for sale in the US by the Food and Drug Administration (FDA), and also banned in Europe in 2010 due to its link to heart disease .
PD Villarreal, senior vice president of global litigation at GSK, commented “We recognise that this is a significant charge, but we believe the approach we are taking to resolve long-standing legal matters is in the company’s best interests.”
He added “We have closed out a number of major cases over the last year and we remain determined to do all we can to reduce our litigation risk.”

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