GlaxoSmithKline faces a legal charge of £2.2bn for the fourth quarter, effectively wiping out its profit, as it settles further claims related to diabetes drug Avandia (rosiglitazone) and sales practices in the US.
The charge equates to an after-tax cost of £1.8bn, which is more than the £1.45bn GSK had been expected to make in net income during the three months ending December 2010.
The charge relates to the estimated settlement from an investigation led by the US Attorney’s Office for the District of Colorado for US sales and promotional practices of drugs including Avandia and antidepressant drug Paxil between 1997 and 2004.
‘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,’ said PD Villarreal, GSK’s head of global litigation.
‘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.’
In July, the UK drugmaker said it would record a charge of £1.57bn in the second quarter to cover the cost of settling ongoing legal disputes.
GSK has continued to receive new product liability cases regarding Avandia in the US.
The charge equates to an after-tax cost of £1.8bn, which is more than the £1.45bn GSK had been expected to make in net income during the three months ending December 2010.
The charge relates to the estimated settlement from an investigation led by the US Attorney’s Office for the District of Colorado for US sales and promotional practices of drugs including Avandia and antidepressant drug Paxil between 1997 and 2004.
‘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,’ said PD Villarreal, GSK’s head of global litigation.
‘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.’
In July, the UK drugmaker said it would record a charge of £1.57bn in the second quarter to cover the cost of settling ongoing legal disputes.
GSK has continued to receive new product liability cases regarding Avandia in the US.
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