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£2.2bn legal charge for GSK

GlaxoSmithKline has said it expects legal charges of £2.2bn to be recorded when it announces its results for the fourth quarter of 2010

GlaxoSmithKline (GSK) has said it expects legal charges of £2.2bn to be recorded when it announces its results for the fourth quarter of 2010. After tax, this figure would be £1.8bn.

The charge is mainly down to provisional costs for legal cases involving the company's type 2 diabetes drug, Avandia (rosiglitazone), as well as the US Attorney's Office for the District of Colorado investigation into GSK's sales and promotional practices in the US.

The UK-based company had already recorded a legal cost of £1.57bn for the second quarter of 2010, which covered the first series of settlement fees for Avandia, as well as further fees for cases involving the antidepressant Paxil (paroxetine).

Avandia was banned in Europe in September 2010 following concerns over the drugs role in increasing the risk of cardiovascular disorders, including heart attack and stroke. The Food and Drug Administration (FDA) also limited use of the drug in the US, placing it in a restricted access programme.

PD Villarreal, SVP Global Litigation, GSK, said: "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."

 

View the interview with GSK'S Andrew Witty about the company's Q4 results. 

18th January 2011

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