British Drugs Giant Fined £1.8bn In US Dispute

British drugs giant GlaxoSmithKline has agreed to one of the largest fines ever levied on a pharmaceuticals firm to settle a trio of disputes with the US government.

The company will pay \$3bn (£1.88bn) to end three separate legal cases over the sales and marketing of nine drugs.

The long-standing claims relate to anti-depressants Paxil and Wellbutrin, as well as the controversial diabetes drug Avandia, which was taken off the market in Europe amid claims that it caused an increased risk of heart attacks.

Some of the allegations dated back to 1997.

GSK chief executive Andrew Witty said: "This is a significant step toward resolving difficult, long-standing matters which do not reflect the company that we are today.

"In recent years, we have fundamentally changed our procedures for compliance, marketing and selling in the US to ensure that we operate with high standards of integrity and that we conduct our business openly and transparently."

Glaxo added that since 2008, its US sales team was paid on an assessment of how effective treatments were rather than the number of prescriptions written.

The disputes being settled include an investigation that started in Colorado and moved to Massachusetts, related to improper marketing of drugs between 1997 and 2004.

Another probe involves charges that GSK used the Medicaid system improperly to make additional profit from sales to the federal programme, while the Avandia case covers investigations into the way the drug was developed and then marketed.

Last year, the company took a \$2.4 billion (£1.5bn) charge after settling most patient liability claims relating to Avandia.

It also resolved an investigation into its former factory at Cidra in Puerto Rico, and anti-trust and product liability litigation over antidepressant Paxil.

Other leading drugmakers have also struck settlement deals in the US in recent years, or have been forced to take big charges in anticipation of such deals.

Last month, Abbott Laboratories took a \$1.4bn (£800m) charge related to attempts to settle a US federal investigation into marketing of its Depakote anticonvulsant drug.

In 2009, Pfizer also paid \$2.3bn (£1.43bn) for pitching its now-withdrawn Bextra arthritis drug and another dozen medicines to patients and doctors for unapproved uses.