GlaxoSmithKline (GSK) has had several difficulties and battles recently but it appears they are taking care of the issues. It was announced today that GSK would be paying a 1.57 billion pound charge which included settlement agreements and fines associated with some litigation problems. Meanwhile, on Wednesday the US Federal Drug Administration (FDA) almost removed one of their major diabetes drugs from the US market.
Part of the 1.57 billion pound charge is the 500 million pounds that GSK has agreed to pay over a lengthy battle involving a US investigation into one of its production plants in Puerto Rico, which GSK closed in 2009. The US Government alleged there were numerous manufacturing problems at the facility.
An anit-trust litigation with drug maker Apotex, a rival who manufactures a generic version of the anti-depressent Paxil was resolved through the charge as well. Currently of concern is the fact that US regulators with the FDA have been threatening the withdrawal of GSK’s diabetes drug Avandia due to concerns about its cardiovascular safety. The FDA is expected to make a final decision in the next few weeks. The European Medicines Agency is also set to review the safety concerns of Avandia.
There have been numerous accusations linking Paxil with birth defects, suicidal behavior tendencies, addiction, and acts of violence. Their other big headliner drug, Avandia, has been caught up in litigation from patients complaining of side-effects.
GSK remarked in a statement that most of the Paxil product liability cases and a substantial number of Avandia product liability cases had been settled.
With the news that GSK was resolving long term litigation responsibilities coupled with the FDA choosing to allow Avandia a reprieve for a few more weeks was good news to investors. Confidence was expressed through trading which showed GSK shares rising over 5p in London on Thursday morning.