Glaxo Plans $2.36 Billion Charge for Legal Costs
July 15, 2010
The Associated Press reports GlaxoSmithKline said that it would take a second-quarter charge of $2.36 billion related to legal cases involving its drugs, Avandia and Paxil. The company made the announcement a day after an American medical advisory panel recommended that Avandia, a controversial diabetes drug, should either be withdrawn from the market or have sales severely restricted because it increases the risks of heart attacks. The company said that the charge announced, which will amount to about $2.1 billion after taxes, “includes provisioning for settled cases and an estimate for those cases which we have received and are still outstanding.” The company also said it had reached an agreement in principle with the United States attorney’s office in Massachusetts and the Department of Justice to pay $750 million to settle the investigation of its manufacturing plant in Cidra, P. R. The company had closed the factory in 2007, after regulators censured the company over quality-control problems.