GlaxoSmithKline to Pay $250 in Avandia Settlement

Settlement in Avandia Lawsuit

The U.K.’s largest drug manufacturer, GlaxoSmithKline Plc, recently agreed to a $250 million settlement for some 5,500 cases against the company for deaths related to its drug Avandia.

Avandia was once the world’s best selling drug for diabetes, bringing in a reported three billion dollars annually. Now that data has linked the drug to thousands of heart attacks, the company has pulled it from the market in Europe and limited sales in the U.S. Additionally, the labels have been changed to include the warnings about the potential for heart attack and stroke.

So far the company has put an estimated $6.4 billion into an account to deal with pending law suits. While the company has about another 10,000 suits pending, the recent settlement, at $46,000 per plaintiff, was a very good deal for the company. Had the cases gone to trial, payout to families would likely have been in the millions for each.

The company appears to have gotten off lightly in the U.K. courts; however, about 2000 cases pending in the U.S. are expected to have a more substantial outcome.