posted by on Jan 17
GlaxoSmithKline, the British drug company and manufacturer of some of the world’s top selling drugs, announced today that it would set aside billions of dollars for legal costs. The GlaxoSmithKline class action is costing the company most of its fourth quarter profits, as it faces rising numbers of lawsuits over Avandia and Paxil.
Today’s amount set aside for legal costs totals $3.4 billion, and that comes no less than six months after another announcement of billions of dollars worth of legal fees. Last summer, GlaxoSmithKline announced that it would spend $2.36 billion for legal defense and ongoing Federal investigation over off label marketing charges and alleged doctor payments regarding Avandia and Paxil.
That means the GlaxoSmithKline class action and Federal investigations in the United States have so far cost the company $5.76 billion in legal fees, settlements, and other legal costs.
Avandia was once the top selling diabetes drug in the world, but has fallen off since discovery of possible serious health concerns. In 2007 a doctor’s analysis revealed a 43% increase in risk of heart attack in patients taking Avandia. Since then, GlaxoSmithKline class actions have been on the rise. And judging from today’s announcement, GlaxoSmithKline doesn’t see an end to legal woes anytime soon.
GlaxoSmithKline also faces allegations of marketing Avandia for treatment of things for which it was not FDA approved. Doctor payments for promoting Avandia are also under investigation, as this practice is against the law in the United States. The British drug company is facing GlaxoSmithKline class action in the US as well as legal woes in the UK. The FDA has severely restricted use of AVandia and in Europe it has been banned altogether by the European Medicines Agency.
