GSK to Pay $229m to Settle Eight US States Lawsuits over Avandia

British drug maker GlaxoSmithKline has agreed to stump up millions of dollars settlement fee, in order to end a raft of lawsuits with eight US states, over improper marketing of its Avandia diabetes drug.

The company will pay $229m (£149m, €173m) to settle the lawsuits brought by US states Louisiana, Kentucky, Mississippi, Maryland, South Carolina, New Mexico, West Virginia, and Utah, according to a regulatory filing.

The settlement amount will be paid from provisions set aside for litigation and encompass allegations related to other GSK products brought by Louisiana's attorney general, the company said.

The company noted that it does not accept any wrongdoing with the marketing of Avandia, and the settlement is to avoid lengthy trials.

It said that it acted responsibly in conducting the clinical trial programme and marketing of Avandia, in monitoring the drug's safety and updating the drug's prescribing label as new information became available.

Avandia

Rosiglitazone, which GSK sells under the trade name Avandia, is a drug used to treat diabetes. It works as an insulin sensitiser.

The controversial drug has reportedly caused several heart attacks in the US and some reviewers recommended it to be taken off from the market. However, it still remains available, but with certain restrictions.

In September 2010, the European Medicines Agency recommended that the drug be suspended from the European market.

It has already been withdrawn from New Zealand and South Africa.

In 2012, GSK negotiated a settlement related to litigations over the drug, which was agreed by 37 other US states.

The eight states, who have taken a more aggressive stance in accusing drug makers, opted out of the settlement.

Other Scandals

The Avandia settlement comes as the company tackles a major investigation by Chinese authorities over allegations of bribery by its executives to illegally boost sales and to raise the price of its medicines in China.

GSK's reputation has been tarnished after Chinese police alleged that senior executives at the company routed 3bn yuan in bribes to doctors through travel agencies and consultancies.

Last year, the company agreed to pay $3bn and plead guilty to criminal charges in the US for marketing products for unapproved uses.

In the healthcare fraud case, which is one of the largest in US history, the company was charged with marketing the antidepressant Paxil to underage patients. It was also accused of not providing the US Food and Drug Administration with Avandia safety data.