GSK pays £2.2bn in Avandia claims

Brentford-based GlaxoSmithKline paid out a record £2.2 billion in the fourth quarter of last year to settle lawsuits relating to the diabetes drug Avandia, which complainants claim can increase the risk of heart attacks.

The payout is the equivalent of £1.8 billion after tax, and effectively wipes out the £1.45 billion profit the company had been expected to make during the three months to December.

GSK is the UK's biggest pharmaceuticals group and the company had already set aside £1.57 billion in the second quarter of 2010 to settle several disputes surrounding allegations of harmful side effects of Avandia, including cases uncovered during a US inquiry into the marketing of several drugs.

A statement from 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.

"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."

Our Commercial Dispute Resolution team has extensive experience dealing with complex claims and works with businesses across West London and the surrounding area. For advice, contact a member of the team, call us on 08456 381 381 or email enquiries@ibblaw.co.uk.