The UK’s largest pharmaceutical company has said the cost of settling legal disputes over controversial diabetes drug Avandia will hit a record £2.2 billion.
GlaxoSmithKline (GSK) said the charge equates to an after-tax cost of £1.8 billion and applies to the fourth quarter of 2010. The charge covers consumer lawsuits alleging the drug harms health, in particular that it increases the risk of heart attack.
The cases also include those stemming from an investigation by the US Attorney’s office in Colorado of GSK’s marketing practices involving a range of drugs.
In July, the drug maker announced it would record a charge of £1.57 billion in the second quarter to cover the cost of settling ongoing legal disputes.
In a statement, GSK said: “The company has continued to receive new product liability cases regarding Avandia in the United States.
“The number of new claims received is substantial and the group has now completed its assessment of these additional cases and an estimate of likely future claims.”
The statement added: “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.
“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.”
GlaxoSmithKline has its headquarters in Brentford, Middlesex, and research bases at Stevenage and Ware in Hertfordshire and Harlow in Essex.
Its UK manufacturing operations include sites at Ulverston in Cumbria, Montrose, Angus, and Irvine in Ayrshire.