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Glaxo Reaches $229 Million Settlement With 8 States on Avandia

GlaxoSmithKline Plc (GSK) has reached a $229 million settlement in principle with eight U.S. states to resolve lawsuits relating to the development and marketing of its Avandia diabetes drug, and a separate action from Louisiana for other products.

The amount is within existing provisions set aside for legal matters, the London-based company said in a statement yesterday.

Glaxo said last year it agreed to pay $3 billion to settle federal and state government claims that it illegally promoted prescription drugs and failed to report clinical data on Avandia, once the world’s best-selling diabetes pill. The drug, which was withdrawn from the European market in 2010, is governed by a strict program in the U.S. that limits its use to patients who understand the risks and have no alternatives.

The $3 billion settlement was the largest-ever in a health-care fraud case in the U.S.

At least 41 whistle-blower complaints against pharmaceutical companies have been filed in U.S. federal fraud cases that contained allegations of improper marketing between 1996 and 2010, leading to $7.9 billion in settlements, according to Aaron Kesselheim of the Harvard School of Public Health.

To contact the reporter on this story: Makiko Kitamura in London at mkitamura1@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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