Glaxo Agrees to $3 Billion Settlement Over Drug Disputes

By November 18, 2011Uncategorized

Drug giant GlaxoSmithKline, the maker of controversial medications like Paxil and Avandia, has agreed to a settlement over some longstanding disputes about the way the company develops and markets its drugs. The amount the company agreed to pay is $3 billion.

The $3 billion settlement is to go toward the civil and criminal claims that are expected to be finalized in 2012. These claims include an investigation that is being conducted by the Department of Justice, which is looking into the diabetes drug Avandia’s association with heart complications. This deal was made after the regulatory clampdown in the United States that was designed to prevent pharmaceutical companies from “bad business” practices such as misleading advertising and poor manufacturing.

When the company announced the settlement outline, Glaxo officials said that it had started making many changes in its selling practices over the past few years in the United States. Glaxo CEO Andrew Witty said that the previously-filed cases “do not reflect the company that we are today.”

The other disputes that were a part of the settlement include an investigation that began back in Colorado and was moved to Massachusetts. That case dealt with issues involving Glaxo’s marketing procedures of drugs between the years of 1997 and 2004. Another one of probes revolves around claims that Glaxo “used the Medicaid system improperly to make additional profit from sales to the federal program.”

Then, of course, there are the claims made against Glaxo back in 2010 that cost the company $2.4 billion in settlement money after a whistleblower charged the company with bad manufacturing processes at their former factory in Cidra, Puerto Rico, involving both Avandia and Paxil. At the time, Glaxo was accused of selling adulterated drugs and packaging problems. There have been thousands of lawsuits against Glaxo in recent years over Paxil and Avandia that just continue to pile up. This latest settlement won’t likely be the last.