Here’s Another Hard Knock for GlaxoSmithKline
GlaxoSmithKline’s (NYSE:GSK) diabetes drug Avandia is no longer the money maker it once was.
Back in 2007, Avandia was a top-seller, generating more than $2 billion in sales annually. But the drug’s sales have dropped significantly since Avandia was linked to an increase in heart-attack risks, and the associated lawsuits have cost the company dearly.
The settlement of the company’s most recent lawsuit cost Glaxo $90 million. The suit, brought by prosecutors from 38 states on November 15, alleged that the company had illegally marketed the drug by misrepresenting its side effects. GlaxoSmithKline did not fight the accusations for long, with an agreement resolving the suit being reached on Thursday.
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“It’s fine to promote a product; it’s not fine to misrepresent a drug’s potential health risks,” Oregon Attorney General Ellen Rosenblum said in a statement announcing the settlement. “When pharmaceutical companies cross the line, the Oregon Justice Department will hold them accountable.”
There have been other suits regarding Avandia’s marketing. In July, GlaxoSmithKline pleaded guilty to criminal charges brought by the U.S. government and agreed to pay $3 million in penalties for promoting antidepressants for unapproved uses and failing to report safety data to the U.S. Food and Drug Administration regarding Avandia. The company has also settled thousands of consumer lawsuits regarding the drug’s side effects. In 2010, the costs of these lawsuits forced the company to record a $2.4 billion charge.
Regarding the most recent lawsuit, GlaxoSmithKline said in a statement: “The company did not admit to any wrongdoing or liability of any kind under these states’ consumer protection laws in this settlement.”