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GSK To Pay $229 Million To Settle Avandia, Drug Lawsuits By 8 State Attorneys General

LONDON — (Mealey's)  GlaxoSmithKline plc (GSK) on July 24 said it has reached an agreement in principle with the attorneys general of seven states to pay $229 million to resolve lawsuits relating to the development and marketing of the diabetes drug Avandia, along with a lawsuit by the Louisiana attorney general relating to other GSK products. 

GSK disclosed the settlement in a Form 6-K filed with the U.S. Securities and Exchange Commission.

In addition to Louisiana, the settling states are Kentucky, Mississippi, Maryland, South Carolina, New Mexico, West Virginia and Utah. 

No Admission Of Wrongdoing 

In a press statement, a GSK spokesperson said, “The Company is settling these matters to avoid the expense and uncertainty of protracted litigation and trial.  The company did not admit to any wrongdoing or liability of any kind under these states laws in this settlement.” 

The spokesperson said the settlement is covered by existing provisions GSK has made for the lawsuits and said the settlement “marks an important step in resolving the long-standing legal matters relating to Avandia.” 

The spokesperson said “we believe we acted responsibly in conducting the clinical trial program for Avandia, in marketing the medicine, in monitoring its safety once it was approved for use and in updating information in the medicine's labeling as new information became available.” 

The spokesperson said that GSK does not believe any conduct at issue in the Louisiana lawsuits violated that state’s laws. 

All AG Lawsuits Now Settled 

The spokesperson said the settlement announced July 24 resolved all outstanding lawsuits brought by state attorneys general, but there are other outstanding suits brought by Santa Clara County in California, the Cherokee Nation and in a number of purported class actions. 

Avandia is an oral prescription drug approved to lower blood glucose in people with type-2 diabetes.  After concerns were raised in 2007 that it increased the risk of heart attacks, the Food and Drug Administration restricted its use. 

A recent readjudication of a study led an FDA advisory committee to recommend easing restrictions.  However, sales have already fallen and the drug is now off patent. 

Settlement History 

Thousands of personal injury lawsuits were filed in federal and state courts, but a majority were resolved in 2011 before trial when GSK took a $2.6 billion charge against earnings for litigation involving Avandia and Paxil.  Later, the company announced that it had taken a $3.4 billion charge. 

In July 2012, GSK paid $3 billion to the federal government to settle allegations involving Avandia and other drugs contained in a whistle-blower lawsuit.  In December, it agreed to pay $9 million to 38 states to settle their Avandia lawsuits. 

GSK also faces a third-party payer lawsuit filed by insurer Humana Healthcare.  

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