GlaxoSmithKline (GSK) yesterday said that it would pay $229 million (£149 million) to eight US states to settle lawsuits over improper marketing of its diabetes drug Avandia.
The latest settlement on Avandia comes after GSK agreed to pay $3 billion last year to the US government over marketing drugs for unapproved uses, not providing Avandia safety data to the US Food and Drug Administration. (See: GSK to pay $3 bn to settle US investigations for promoting drugs for unapproved uses)
The settlement also comes amid an ongoing probe against the company in China over several charges, including of its senior executives bribing officials, doctors and others to prescribe its medicines and arbitrarily raising drug prices in the country.
The London-based company reached the settlement with the states of Kentucky, Louisiana, Maryland, Mississippi, New Mexico, South Carolina, Utah and West Virginia.
The settlement also resolve allegations made by the Louisiana attorney general related to other GSK products, the London-based company said in a regulatory filing.
Shortly after launching Avandia in the market in 1999, SmithKline Beecham's research labs began a study to find out whether the drug was safer for the heart than a competing pill, Actos, made by Japanese drug maker Takeda.
The findings showed that Avandia posed significant heart risks, but within a year of its internal research finding, US drug giant SmithKline Beecham merged with British drug giants Glaxo Wellcome in 2000 to form GlaxoSmithKline.
Although GSK is required in most cases by the US and other countries' laws to post the research results on its website or submit them to drug regulators, the merged entity chose to ignore the law.
GSK then spent the next 10 years trying to cover up the findings by putting a ''safety risk'' tag to the drug, which otherwise would have resulted in $600 million in lost sales from 2002 to 2004 alone.
Avandia was once GSK's top-selling drug until the side effects of the drug came into public domain that led to shrinking global sales of the pill from £1.4 billion in 2006 to £771 million last year.
The drug has now been pulled out from most markets but is still being sold in the US with restrictions.