GlaxoSmithKline (NYSE: GSK) has agreed to pay more than $1 billion of its $2.4 billion legal expense budget to settle hundreds of Paxil birth defect lawsuits. Families whose children were born with birth defects after their mothers used Paxil will each get an average of $1.2 million from the company.
The settlement covers more than 800 of the birth defect cases, leaving more than 100 pending, sources tell Bloomberg. GSK spokeswoman Claire Brough confirms for Reuters that other birth-defect cases are still outstanding. Three of them are scheduled for trial in Philadelphia in September, she said.
"GSK has reached agreement to settle certain cases involving the use of Paxil during pregnancy," Brough says. "The details of those settlements are confidential...The company has agreed to these settlements, despite its litigation defenses, in order to avoid the costs, burdens and uncertainties of ongoing litigation."
The company wouldn't say how much of the $2.4 billion charge--which significantly dragged on GSK's Q2 earnings--will go to resolving Paxil lawsuits. Nor would it specify how much is set aside for Avandia settlements, but the company has already agreed to pay more than $500 million to resolve some Avandia suits. Some $750 million is earmarked to settle a government probe of a factory in Puerto Rico.
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ALSO: GlaxoSmithKline swung to a net loss in the second quarter, after major restructuring and a £1.57 billion ($2.39 billion) charge wiped out continued strong sales of new products, the drugmaker's pandemic flu vaccine and further expansion in emerging markets. Report