GlaxoSmithKline Plc, the maker of Avandia and the U.K.’s biggest drugmaker, said it will have fourth-quarter legal costs of 3.5 billion dollars because of a U.S. investigation into sales practices for certain products and product-liability cases related to the Avandia diabetes drug.
The company is setting aside additional provisions for the investigation by the U.S. attorney in Colorado into the company’s sales and promotional practices of certain products, London-based Glaxo said in an e-mailed statement today. The money also will cover for the “substantial” number of new claims filed in the U.S. regarding Avandia, Glaxo said.
Avandia Withdrawn
The company has stopped promoting Avandia worldwide after regulators said the treatment would be withdrawn from the market in Europe and sales would be limited in the U.S. because of an increased risk of heart attacks. Avandia was once the world’s best-selling diabetes drug.
The U.K. drugmaker has “now completed its assessment of these additional” Avandia cases and made “an estimate of likely future claims,” the company said. Glaxo didn’t say how many Avandia cases remain to be settled and that is a concern.
Avandia Colorado Investigation
The U.S. attorney in Colorado issued a subpoena in 2004 over Glaxo’s “sales and promotional practices relating to nine of its largest selling products,” the company said in its 2009 annual report. Federal prosecutors in Colorado are investigating whether Glaxo promoted the drugs for unapproved uses, the company said.
The investigation, which is nationwide in scope, also looks into ways that Glaxo potentially influenced doctors, including company-sponsored medical education programs, speaker events, advisory boards, speaker training programs, clinical studies and “related grants, fees, travel and entertainment.”
Glaxo hasn’t disclosed which products are the subject of the investigation. Alex Harrison, a spokeswoman for Glaxo, declined to comment in an e-mail.
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