GlaxoSmithKline Sets Aside $3.4 Billion to Cover Legal Costs

Wednesday, January 19, 2011
Pharmaceutical manufacturer GlaxoSmithKline is preparing to spend $3.4 billion to pay for investigations and lawsuits related to its diabetes drug Avandia.
The money—equal to the company’s 2010 fourth quarter profits—comes after allocating $2.36 billion last summer to settle 10,000 Avandia product liability lawsuits, as well as cover costs stemming from Paxil investigations and troubles related to its Puerto Rico operation.
The $3.4 billion was set aside after more lawsuits were filed over Avandia, once the world’s top-selling diabetes medicine, before it was discovered to increase the risk of heart attacks by 43%.
The Food and Drug Administration has now limited the sale of the drug, while the European Medicines Agency has banned it altogether.
-Noel Brinkerhoff


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