GlaxoSmithKline to pay states $229M to wrap Avandia suits, other claims

GlaxoSmithKline ($GSK) has wrapped up another set of Avandia lawsuits. The drugmaker said it reached a deal with 8 state attorneys general to resolve lawsuits involving the controversial diabetes drug. Together with a separate settlement with the state of Louisiana, related to other GSK products, the amounts promised total $229 million.

Glaxo disclosed the agreements in a quarterly filing with the Securities and Exchange Commission. The company "has reached settlements in principle with the Attorneys General of eight states to resolve lawsuits relating to the development and marketing of Avandia," the filing noted, "as well as the separate action brought by the Attorney General of the state of Louisiana relating to other ... products." The $229 million falls within existing provisions for legal settlements, the filing said.

The 8-state settlement closes the book on Glaxo's fight with U.S. states over Avandia-related consumer-protection claims. These 8 states opted out of a previous $90 million settlement with other AGs.

Now withdrawn in Europe and restricted in the U.S., Avandia was once a major seller for Glaxo. But sales began to tail off after a high-profile data analysis linked the drug with an increased risk of heart attack and other cardiovascular problems. A long and very public debate ensued, till U.S. regulators decided in September 2010 to place strict limits on its sale, and European watchdogs simultaneously determined to pull it from the market.

Those safety findings are again in dispute, with the FDA apparently considering easing the restrictions, but a legacy of liability lawsuits and whistleblower claims remains. The company agreed last year to pay $3 billion to settle claims that it marketed Avandia and other drugs for unapproved uses and misled the public about the diabetes drug's safety. The deal covered a Justice Department investigation and whistleblower suits filed by a number of states.

And early last year the company settled some 25,000 claims filed by Avandia patients, on top of the 20,000 settled previously. The company also faces a lawsuit filed by the health insurer Humana, which is seeking to recoup its spending on the drug.

- see the SEC filing

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