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17 January 2011
Last updated at 11:25 ET
GlaxoSmithKline has said it has set aside £2.2bn ($3.4bn) in the fourth quarter of 2010 to cover legal costs related to its diabetes drug Avandia.
The charge is primarily due to additional costs related to the investigation of the company's sales and promotional practices in the US.
Avandia was banned in Europe last year while the US restricted its use because of a suspected link to heart disease.
The charge is in addition to a £1.57bn charge Glaxo announced in July.
That was to cover various legal settlements, including claims over Avandia, as well as antidepressant Paxil and an investigation into standards at a Puerto Rico factory.
"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," said PD Villarreal, senior vice president at Glaxo's global litigation team.
"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."
Glaxo shares fell 2% after the announcement in afternoon trading in London.
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The charge is primarily due to additional costs related to the investigation of the company's sales and promotional practices in the US.
Avandia was banned in Europe last year while the US restricted its use because of a suspected link to heart disease.
The charge is in addition to a £1.57bn charge Glaxo announced in July.
That was to cover various legal settlements, including claims over Avandia, as well as antidepressant Paxil and an investigation into standards at a Puerto Rico factory.
"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," said PD Villarreal, senior vice president at Glaxo's global litigation team.
"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."
Glaxo shares fell 2% after the announcement in afternoon trading in London.
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