Quoted from http://www.nytimes.com/2011/01/18/business/18drug.html
Glaxo Takes $3.4 Billion Charge on Legal Problems
By DUFF WILSON
Published: January 17, 2011
The British drug maker, GlaxoSmithKline, announced Monday that it was setting aside $3.4 billion to pay for United States government investigations and for product liability cases over its marketing of the diabetes drug Avandia in the face of heart attack risks.
The one-time charge is expected to wipe out its fourth-quarter profits, by consensus analyst estimates. GlaxoSmithKline’s European shares fell about 2 percent on the news.
Avandia, once the world’s top-selling diabetes medicine, was severely restricted in September by the Food and Drug Administration and banned by the European Medicines Agency after safety reviews.
GlaxoSmithKline took a $2.36 billion charge last summer to settle what it called “the substantial majority” of Avandia product liability lawsuits, as well as Paxil product liability cases and a Puerto Rico manufacturing case.
But it has received “substantial” new claims since then, the company said in a statement Monday to the London Stock Exchange. The $3.4 billion charge will be used for those product liability claims as well as costs related to an ongoing investigation by a federal prosecutor, the company said in the statement.